The Role of Aadhaar in Udyam Registration Process
If you have or are planning to launch a small-scale company in India chances are you've been exposed to the term Udyam Registration. This is an initiative from the Government of India to simplify the process of officially recognizing Micro, Small, and Medium Enterprises (MSMEs). Being registered with Udyam Registration doesn't just grant your business legal status but will also grant you numerous benefits like schemes, and subsidies to help promote entrepreneurship as well as growth.
In this article, you'll learn everything you should know about Udyam Registration such as what you need to know about eligibility, the process as well as the benefits and why it's important.
What Is Udyam Registration?
Udyam Registration can be a government-issued certificate that recognizes your company as an MSME under the Micro, Small and Medium Enterprises Development Act 2006. The first day of July, 2020 was the 1st day of Udyam Registration It replaced the previous Udyog Aadhaar Memorandum system.
The registration process is entirely online, paperless and is based on self-declaration. Once you have registered, your business gets a unique Udyam Registration Number and an electronic certificate which is available for download at any time.
What is the reason why Udyam The Registration of Udyam So Important?
Here are the primary motives why every MSME ought to think about registering:
Government schemes that are designed for small businesses.
Priority credit and lower interest rates from banks.
The ability to participate in government tenders and contracts reserved exclusively for small and medium-sized enterprises.
Increased credibility with buyers, suppliers, and investors.
The law provides statutory protection for recovering payments and dues.
Who is eligible to apply?
Any business that is involved in manufacturing or supplying services can apply to Udyam Registration. However, your business has to comply with certain investment and turnover criteria, as per the new MSME classification.
Micro enterprises are businesses with the potential to invest up to 1 crore rupees and an annual turnover of up to 5 crore rupees. Small enterprises can invest up to 10 crore rupees and turnover as high as 50 crore rupees. Medium enterprises may invest that can reach 50 percent, and turnovers up to 250 crore rupees.
Trade companies that are solely engaged in buying and selling, without the purpose of adding value aren't considered eligible.
What are the advantages of Udyam Registration?
Financial Benefits
Registered MSMEs can access collateral-free loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises scheme. They also have the option of claiming subsidy on patent registration as well as industrial promotion expenditures and enjoy discount rates on overdraft facilities.
Market Access
Udyam Registration helps to be a part of government tenders. Some services and products are exclusive to MSMEs, resulting in a clear competitive advantage.
tax and Compliance Relief
Registered MSMEs get priority in government procurement, reimbursement of ISO Certification costs and quicker resolution of disputes regarding payment with clients.
Business Credibility
The possession of Udyam Registration improves the confidence of potential clients, partners and investors. It lets them know that your business is in compliance and is recognized by the law of the nation.
The Step-bystep process to register
Here's how you can register your business:
Check out the official Udyam Registration website. MSME Registration Online
Choose if you're either a brand new entrepreneur or are moving over from Udyog Aadhaar.
Enter Aadhaar details of the proprietor either a partner, proprietor or signatory in accordance with your firm's model of operation.
Validate your Aadhaar with the OTP sent via your mobile number.
Fill in business information including name of address, address as well as the number of employees as well as information about investment and turnover.
Submit the form and complete the final OTP verification.
Receive your Udyam Registration No. and download the Udyam Registration Certificate.
Documents required
The process is paper-free and doesn't require any physical document uploads. But, it is important to have the following information ready:
Aadhaar Number
PAN Number
Business bank account details
Information about investing in plant machinery, equipment, or plant
Information on turnover for the previous financial year
All verification is completed automatically through government databases such as GST in addition to Income Tax records.
What happens following registration?
You will receive a long-lasting Udyam Register Number. This certificate does not expire. If however, your turnover or investment crosses the specified limitations, you must change your information online. The business can be classified according to the data available in income tax and GST documents.
Common Falsehoods to Avoid
A lot of applicants make mistakes that can result in rejection or delay. Here are a few common mistakes:
Making mistakes in entering Aadhaar or PAN information.
Not recognizing the correct classification for business activity.
No update of turnover every year.
Incorrect information provided in comparison to GST or tax records.
Frequently asked questions
Is there any fee in connection with Udyam Membership?
No this is totally free. Beware of agents who charge fees for this service.
Do businesses have several Udyam Registrations?
No it is not possible. Only one registration per enterprise is allowed. You have to cover all activities that are part of identical registration.
What happens if I don't register?
Your company will not be eligible for subsidies or support schemes, or protections provided under MSME laws.
Conclusion
Udyam Registration is an essential step for small companies operating in India. It provides access to financial benefits as well as market opportunities but also gives your business legal recognition and credibility. The process is simple, transparent, and entirely digital, making it much easier than ever before for entrepreneurs to gain the benefits from MSME registration.
If you're yet to register this is the ideal moment to make this vital move to increase the strength and growth of your company. By taking care to be compliant and using the support of the government, you will be able to position your business for the long term and ensure its resilience.