Before discussing about the pros and cons of UDYAM registration, many newbie entrepreneurs still have questions about what UDYAM Registration is! So, if you have the same confusion, let us make it clear before coming to the point.
UDYAM Registration (commonly known as MSME Registration) is a government registration process for small/medium businesses and enterprises. With this registration, a recognition certificate and a unique number are provided to the owner by the government to identify and regard the entity’s business according to the government guidelines.
This scheme is launched by the government of India with the objective of providing maximum benefits to medium or small-scale businesses or industries who are registered via MSME through their AADHAR Card Number. There are mandatory guidelines for enterprises or entities whether they are a sole proprietor, LLP, or Private limited companies.
Who All Can Register for UDYAM?
The organizations who are in to manufacturing or producing or processing or preserving the goods or offering the services are eligible for UDYAM Registration. The distinct size of businesses is classified as micro, medium, small-enterprise with set criteria for obtaining the MSME certification. According to the current notification, the following entity (manufacturing and service sector) are eligible for UDYAM registration.
- Micro Enterprises for the Investment up to INR 1 Cr and turnover up to INR 5 Cr
- Small Enterprises for the Investment up to INR 10 Cr and turnover up to INR 50 Cr
- Medium Enterprises for the Investment up to INR 50 Cr and turnover up to INR 250 Cr
UDYAM Registration (Sole Proprietor, an LLP, a PVT. LTD. Company)
Pros: LLPs, Private Ltd companies, Sole proprietors, can avail of many benefits of UDYAM registration.
- Avail of government tenders easily
- Get a loan on lower interest rates (Upto 1.5% lower than interest on regular loans)
- Get various kinds of tax rebates
- Obtain licenses, approvals, and registrations, regardless of the field of business.
- Take advantages of higher preference for license & certificates
- Avail business credit at lower interest rates
- Avail tariff subsidies and tax & capital subsidies
- Avail for patent done and set up an industry at a lower cost
- Avail of many rebates and concessions.
UDYAM registration (Small Entities, Business)
Pros: Small entities & Business owners who is registered under MSME can avail these benefits under MSME law:
- Collateral Free Loans from Bank
- Easy Clearance of Pending Payments
- On trademark and Patent Fees – 50% discount
- Some Concession on Electricity bill
- Avail for Tax exemptions under direct tax laws
- Avail of many rebates and concessions.
- Avail business credit at minimum interest rates
- Reimbursement of ISO Certification charges
UDYAM Registration (Freelancer)
Pros: Freelancers who are registered under MSME can avail these benefits:
- Avail a loan at minimum interest rates
- Get different kinds of tax rebates and exemptions
- Obtain licenses, approvals, and registrations easily
- Avail business credit at minimum interest rates
- Avail of many rebates and concessions.
Cons: Freelancers who earn less than INR 5 lacs may find their GST filing or taxes costly after registering under MSME law.
UDYAM Registration (Self-Employed)
Pros: self-employed registered under MSME can avail of the following advantages:
- Get government tenders easily
- Avail of a loan at minimum interest rates
- Avail for Tax exemptions under direct tax laws
- Obtain licenses, approvals, and registration
- Avail business credit at minimum interest rates
- Avail of any rebates and concessions.
Cons: Self-employed registered under MSME may find their GST filing costly under the new MSME which are implemented from 1st April 2021.
How Can You Register for UDYAM?
The procedure of UDYAM Registration is simple, smooth and the process is also free of cost. So, anyone can go for UDYAM registration without so much hurdle. Check out the simple guide for MSME registration.
Step 1: Visit the https://udyamregistration.gov.in/- official UDYAM Website and click on the option named as “For new Entrepreneurs who are not registered yet as MSME”.
Step 2: Enter Your Personal Information like name and Aadhar Card number. Click on “Validate and Generate OTP.” On your registered mobile number you will get an OTP. Enter your OTP.
Step 3: Choose the organization type, enter your PAN no. and click on validate.
Step 4: Enter Correspondence Details like the company/enterprise/entity’s postal address, information about your company’s district, pin code, state, email address, and mobile number.
Step 5: Enter the bank account no. with the IFSC code of the concerned bank branch.
Step 6: Enter your business details like the total number of employees and the NIC i.e. National Industry Classification Code for Activities.
Step 7: Select the district industry centre from the provided drop-down list on website, accept the declaration, and press mouse on “Submit and Get final OTP”
Step 8: Enter the OTP received on mobile and press Final Submit button.
Soon you submit the application, and you will receive a registration number. After verification of your submit information, you will receive an e-registration document in your registered e-mail.