Benefits of MSME Udyam Registration

Udyam Registration was introduced by the Ministry of Micro, small and medium Enterprise replacing the former process “UDYOG AADHAAR”, effective from 1st July 2020 for Micro, Small, and Medium Enterprises. The former procedure was quite dilatory as it involved innumerable paperwork to be dealt with in order to get done with the registration. The introduction of the Udyam Registration by the ministry has eased the process to an extent compared to its predecessor. This article will provide the overview and benefits of the Udyam Registration that MSMEs are entitled to upon successful registration.

What is Udyam Registration?

Newbies might be wondering what Udyam Registration is and what changes have been brought in with the removal of the formal procedure? Don’t worry, we’ve got you covered.

Udyam Registration is a government registration process that certifies MSMEs with a unique identity number and a certificate. The sole motive behind the launch of the Udyam Registration was to grant benefits to all the MSMEs registered under this process. If you own a medium, small, or micro-enterprise, you should consider registering your MSME via Udyam Registration to reap countless Udyam Registration benefits.

Eligibility criteria

The Firm must come under Micro, Small or Medium Enterprise.
Micro-enterprises having an investment of more than ₹1 Crore are not eligible for Udyam Registration benefits.
Small Enterprises' investment must not exceed ₹10 Crores while medium enterprises' investment must not exceed ₹50 Crores.
Udyam Registration benefits vary depending upon the annual turnover of the MSME.

Micro-Enterprises: Turnover up to ₹5 Crores.
Small Enterprises: (₹5-₹75 Crores).
Medium Enterprises: Turnover up to ₹250 Crores

Udyam Registration benefits

MSMEs are entitled to the following Udyam Registration benefits:

Eligible for Collateral free loans

Collateral free funding up to 2 crores is offered by the Government of India under the “CTGSME Collateral Free Finance” scheme to MSME Entrepreneurs. Udyam Registered businesses with an annual turnover of 250 Crores are qualified to take benefit of this scheme. The scheme can also be availed with an investment of 50 crores in Plant and machinery.
Exemption of Direct Taxation

Udyam Registered MSME enterprises are exempted from direct tax in the initial year of business. It depends on the nature of the business activity.
Access to licenses, approvals, and registrations

Udyam Registered MSMEs are favored for various registrations and licenses by the government.
Subsidy on interest rates offered by banks on loans

Banks are required to offer a 2% interest rate subsidy on fresh or incremental loans to Udyam Registered enterprises under the interest subvention scheme.
Concession by the Govt. on electricity bills

Businesses registered as MSME are eligible to get concessions on electricity by the government.
Benefits up to 50% on trademark and patent fees

Enterprises registered as MSME can avail 50% discount on trademark and patent fees using MSME/ Udyog Aadhaar/SSI Reg. Certificate.
Exemption of 1% interest rate on overdraft

Businesses registered as MSME can avail of an exemption of 1% interest rate on overdraft. However, it varies from bank to bank.
ISO Certification costs can be claimed

ISO certification costs can be quite an expensive affair. However, the government provides reimbursement benefits to MSMEs seeking ISO 9000/ISO 14001 Certification. The reimbursement limit is 75% of the cost incurred and can go up to a maximum of 75,000 Indian rupees.
Special consideration on International Trades:

The Enterprise must be registered through Udyog Aadhaar Memorandum (UAM) to benefit from the scheme. Following are the elements of the scheme:
1. Vendor Development Programmes.
2. National and International Workshops on Packaging, Marketing, Public Procurement.
3. Reimbursement on Bar Code.
Claim registration costs and stamp duty waiver:

The Government has provided concessions to businesses registered as MSMEs under the Aatmnirbhar Scheme.
Safeguard against delayed payments:

Provision for delayed payment to Micro, Small, and Medium Enterprises has been provided under the Micro, Small, and Medium Enterprise Development Act (MSMED 2006).

Credit rating subsidy.

Turnover up to 50 Lacs	75% of the fees levied by the Credit rating agency subject to a ceiling of 15,000 INR.
Turnover above 50 Lacs and below 200 Lacs	75% of the fees levied by the Credit rating agency subject to a ceiling of 30,000 INR
Turnover of above 200 Lacs	75% of the fees levied by the Credit rating agency subject to a ceiling of 40,000 INR

Barcode registration subsidy:

The Micro, Small, and Medium sector enterprises are provided 75% reimbursement of a) Registration Fee and b) Annual recurring fee for the first 3 Years for Bar Code use in order to enhance the marketing competitiveness.

Those are some of the many Udyam Registration benefits that MSMEs would be entitled to upon registration.

Documents required for Udyam Registration

The following documents are required for Udyam Registration:

PAN of the Enterprise
Mobile/Phone Number
Fax Number
Aadhaar Card of the Entrepreneur
GST Certificate
Entrepreneur’s Aadhaar
Email-Address
Social Category of the Entrepreneur
Number of Employees (Male and Female Specified)
Nature of the Business
Recent Audited Financial Statements
Memorandum of Association
Article of association
Copy of passbook
Date of commencement of Business.
Partnership deed, if any
Company's registered documents

Steps to Register as MSME

If you haven’t registered your Enterprise as MSME yet, follow the below steps for Udyam Registration:

Step 1: Visit the Udyam Registration portal

Step 2: Fill out all the mandatory details like Applicant’s Name, Mobile Number, Email-id, Bank details, Date of commencement of business, etc.

Step 3: Upload the front and back sides of your PAN Card.

Step 4: After filling out the details, select “Agree to Terms and Conditions”.

Step 5: Enter the Verification Code.

Step 6: Double-check the details and proceed to submit the application.

Step 7: After submission of the form, you will be redirected to the payment gateway.

Step 8: Post payment process, E-Registration Certificate will be sent to your registered email id.

Conclusion

We hope that you would have gone through the entire article covering the benefits of MSME Udyam Registration. If you own a business, small or medium, you should hurry to get your business registered to avail the maximum benefits of Udyam Registration. The process is quite simple and hassle-free and is a paper-free process.