Micro, Small and Medium Enterprises (MSMEs) have a significant contribution to the growth of the economy. The government extends various benefits to the MSME sector to help them grow. However, for availing governmental and other benefits, it is important for an enterprise to be classified as an MSME by obtaining MSME registration. This is where Udyam registration plays its role. What is Udyam registration and what are the benefits of Udyam registration? Further, how can you obtain Udyam certificate? Let’s find out!
What is Udyam Registration?
Udyam registration is the principal governmental registration certificate for the MSME sector. It acts as proof that the organisation is an MSME organisation. The primary objective of Udyam registration is to provide various governmental, legislative and financial benefits to MSME enterprises.
Before Udyam, the Udyog Aadhaar certificate was the registration of MSMEs in India. However, beginning from 31st March 2021, the Udyam MSME certificate has become the sole certificate for MSMEs. Udyog Aadhaar registrations were valid till 31st March 2021 following which they had to be migrated to Udyam registration.
What are the Criteria for Obtaining Udyam Registration Certificate?
For obtaining Udyam MSME certificate, it is important that the organisation fulfils the criteria of being an MSME enterprise. The following are the criteria for becoming an MSME enterprise:
|
Type of Enterprise |
Eligibility Criteria |
|
|
Investment in Plant and Machinery should be less than |
Turnover should be less than |
|
|
Micro Enterprise |
Rs. 1 crore |
Rs. 5 crores |
|
Small Enterprise |
Rs.10 crores |
Rs. 50 crores |
|
Medium Enterprise |
Rs. 50 crores |
Rs. 250 crores |
Why Udyam is Important for Cheaper Credit?
MSMEs can benefit from the credit facilities extended by the banks. Certain loans are exclusively available for the MSME sector. Hence, Udyam registration becomes important to prove that an organisation is an MSME organisation. Further, the Udyam MSME certificate also acts as business proof for any type of loan. Furnishing an MSME Udyam MSME certificate allows you to get affordable loans as well as MSME-exclusive loans.
Another significant benefit is the waiver of collateral requirements. Usually, you need to furnish collateral security while availing loans from banks. But this requirement can be waived if you furnish an MSME certificate in line with the terms of the credit facility. Interest rate concessions, waiver of collateral etc. are some of the peculiar benefits of MSME registration. But it can only be availed if you possess a Udyam registration certificate.
What are the Other Udyam Registration Benefits?
Udyam Aadhaar registration carries a lot of advantages for the MSME sector. Here are some of the primary advantages that Udyam ensures for the MSMEs in India:
1.Registration Proof for MSMEs
Udyam is the sole proof of MSME registration. If you possess a valid Udyam MSME certificate, then you get classified as an MSME enterprise and are eligible for all the benefits extended to the MSME sector.
2.Obtaining Government Tenders
Certain tenders are released by the government for the MSME sector. One of the important criteria for obtaining such contracts is the registration certificate of MSMEs i.e., Udyam. As Udyam is the sole MSME registration certificate, therefore, it becomes an important document for government tenders.
3.Availing Benefits of Governmental Schemes
The government initiates various schemes for MSMEs. Some of these schemes include Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE), Export Market Promotion, Credit Linked Capital Subsidy Scheme etc. Such schemes are exclusively for the benefit of the MSME sector. Hence, Udyam registration becomes important here to establish that your organisation is an MSME organisation.
4.Lower Costs for Certain Registrations
Certain registrations like trademarks, copyrights, patents etc. involve governmental fees. However, being an MSME-registered enterprise can allow you to get concessions in the government registration fees for such schemes. This can help save a lot of costs for important registrations.
Udyam Registration Process
The government has simplified the registration process for obtaining Udyam certificate by making the process for Udyam registration online. The applicant needs to have an Aadhaar in order to get registered as an MSME enterprise. In the case of non-individual enterprises like partnership firms, companies or LLPs, the Aadhaar of the partner or director shall be used for obtaining Udyam registration. The process for Udyam registration is quick and simple and one can immediately access the Udyam MSME certificate after the application process gets completed.
In case you fulfil the criteria of an MSME enterprise in terms of investment and turnover, then you should apply for the Udyam MSME certificate in order to avail of all the above Udyam registration benefits. In case you need any assistance in obtaining Udyam registration, feel free to contact your eAuditor Office
