Introduction
Small and Medium Enterprises (SMEs) are the backbone of the Indian economy. They contribute to a significant portion of the country’s GDP and provide employment to millions of people. In order to support and promote these SMEs, the Indian Government has introduced various schemes and initiatives. One such initiative is the Udyam Registration. In this article, we will discuss how Udyam Registration can help SMEs and why it is important for them to get registered.
What is Udyam Registration?
Udyam Registration is a government registration that is provided to small and medium enterprises in India. It was introduced by the Ministry of Micro, Small and Medium Enterprises (MSME) in July 2020. The registration process is entirely online, and it is free of cost.
Earlier, the registration process for MSMEs was based on the investment made in plant and machinery or equipment. But now, the registration process is based on the turnover of the company. Any company with a turnover of up to Rs. 5 crore can get registered as an MSME.
Benefits of Udyam Registration
Access to Credit
One of the biggest benefits of Udyam Registration is that it makes it easier for SMEs to access credit. Many banks and financial institutions prefer to lend money to registered MSMEs as they are seen as more credible and reliable borrowers. With Udyam Registration, SMEs can get loans at lower interest rates, which can help them grow and expand their business.
Government schemes and subsidies
There are many government schemes and subsidies that are available only to registered MSMEs. For example, the Government of India has launched the Prime Minister’s Employment Generation Programme (PMEGP) to promote entrepreneurship among youth. Only registered MSMEs are eligible to apply for this scheme.
Protection against delayed payments
SMEs often face the problem of delayed payments from their clients, which can cause cash flow problems. However, with Udyam Registration, SMEs can protect themselves against such delayed payments. The government has launched the Samadhan Portal, which allows registered MSMEs to file a complaint against any buyer who delays payments.
Access to government tenders
\Many government tenders are reserved for MSMEs. With Udyam Registration, SMEs can participate in such tenders and get a chance to work with the government. This can help them establish themselves in the market and increase their credibility.
Tax benefits
Registered MSMEs are eligible for various tax benefits and exemptions. For example, under the GST regime, MSMEs with a turnover of up to Rs. 40 lakhs are exempted from paying GST. Similarly, under the Income Tax Act, MSMEs can claim deductions for various expenses incurred for the business.
Credibility
Udyam Registration provides SMEs with credibility in the market. It shows that the company is recognized and registered by the government, which can help them gain the trust of their clients and suppliers. This can lead to more business opportunities and growth for the SME.
Process of Udyam Registration
The process of Udyam Registration is simple and can be done entirely online. Here are the steps to follow:
Step 1: Visit the official Udyam Registration portal
The first step in the Udyam Registration process is to visit the official Udyam Registration portal. The portal can be accessed at https://udyamregistration.gov.in/. This portal is the only official platform for registering for Udyam Registration, and applicants should be wary of any other sites or portals that claim to provide Udyam Registration services.
Step 2: Enter your Aadhaar number and name
In the second step, applicants are required to enter their Aadhaar number and name as mentioned on the Aadhaar card. Aadhaar is a 12-digit unique identification number issued by the Indian government to residents of India, based on their biometric and demographic data. Applicants should ensure that the name entered in the registration form matches the name on their Aadhaar card.
Step 3: Enter the PAN number of the business
In this step, applicants are required to enter the PAN (Permanent Account Number) of the business. PAN is a ten-digit alphanumeric number issued by the Income Tax Department to individuals and entities. It is a mandatory requirement for all businesses in India.
Step 4: Enter the details of the business
Applicants are required to enter the details of the business, such as the name of the company, type of organization, and address. Applicants should ensure that all details entered are accurate and match the details of the business as registered with the relevant authorities.
Step 5: Enter the bank details of the business
In this step, applicants are required to enter the bank details of the business, such as the account number and IFSC code. The IFSC (Indian Financial System Code) is a unique eleven-digit alphanumeric code assigned to each bank branch by the Reserve Bank of India. Applicants should ensure that the bank details entered are accurate, as any errors can lead to delays in processing the application.
Step 6: Enter the details of the person authorized to sign the application form
In this step, applicants are required to enter the details of the person authorized to sign the application form. The authorized signatory should be a person who has the authority to represent the business and sign legal documents on its behalf. The details entered should be accurate and match the details of the authorized signatory as per the records of the relevant authorities.
Step 7: Enter the details of the previous registration, if any
In this step, applicants are required to enter the details of any previous registrations that the business may have had. This includes details of any previous MSME registration or Udyog Aadhaar registration. Applicants should ensure that all details entered are accurate and match the details of the previous registration certificates.
Step 8: Submit the application form after verifying all the details
In the final step, applicants should review and verify all the details entered in the registration form. Once satisfied that all the details are accurate, the applicant can submit the form. After submission, a registration certificate will be issued to the applicant, which will contain a unique Udyam Registration Number (URN) and a QR code for verification purposes.
Conclusion
In conclusion, Udyam Registration process is a crucial step for small and medium enterprises in India. It provides various benefits, including access to credit, government schemes and subsidies, protection against delayed payments, tax benefits, and increased credibility in the market. The registration process is simple and can be done entirely online. Therefore, it is highly recommended for SMEs to get registered and take advantage of these benefits.