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MSMEs are one of the main thrusts of the economy. Privately held businesses make jobs and result in the activation of assets. They add to the improvement of the country overall. Understanding their significance and furthermore to boost individuals to begin organizations, the public authority on first July 2020 launched Udyam Registration. Udyam Registration manages the classification of MSMEs and streamline the methodology for their registration. In this article, we make sense of Udyam Registration and the process relating to its registration.
Classification of MSMEs
An enterprise is classified into three classes. It should satisfy both the criteria of the class it seeks registration in. If an enterprise crosses specified limits of the class it is in, then it would stop existing in that classification when it passes the threshold of any of the Model. It would then be moved towards the upper classification. As per the guidelines laid out by the government:
- A Micro Enterprise is one where the investment in plant hardware or equipment is not more than 1 crore and the turnover of the Enterprise does not exceed 5 crores.
- A Small Enterprise where the investment in plant hardware or equipment is not more than 10 crore and the turnover of the Enterprise does not exceed 50 crores.
- A Medium Enterprise where the investment in plant hardware or equipment is not more than 50 crore and the turnover of the Enterprise does not exceed 250 crores.
Any individual intending to start a business and establish a Micro, Small or Medium Enterprises needs to file for Udyam registration on the Udyam registration portal. The cycle depends on self-declaration and does not need the applicant to upload or attach documents, certificates for any legitimate evidence.
On registration the concerned enterprise (which is alluded to as Udyam on the portal) will be assigned a Permanent Identity Number. This number is alluded to as Udyam registration number. An e-certificate will be given upon the completion of the registration cycle. This is alluded to as a registration certificate.
All business units having similar Goods and Services Tax Identification Number (GSTIN) and the Permanent Identity Number will be aggregately treated. They will be named as one Enterprise. They will be classified into the applicable MSME classification basis the aggregate values of the investment and turnover.
Udyam Registration Process
- Open Udyam Registration website
- Choose the first option “for new entrepreneurs who are not registered under MSME”
- Enter Aadhaar number and the name of Business
- Click on the checkbox below. Make certain to peruse any terms prior to concurring.
- Click on validate and Create OTP
Following this, an OTP will be sent to the telephone number connected to your Aadhaar.
- Enter OTP and click submit
Documents for Registration Process
The Aadhar Card of Proprietor, Pan Card of Proprietor, Name of the Enterprise, Bank details of the Enterprise, Activity of the Enterprise, Investment in plant and Machinery, Number of Employees etc.
Benefits of Udyam Registration
Udyam registration plays a fundamental part particularly for small and medium sizes of business all through India. It is found that overall financial development of a country greatly relies upon its small and medium size organizations. Udyam registration online offers entrepreneurs the opportunity to avail benefits under the ongoing MSME plan of the Indian Government. One of the vital advantages of registration is that you can undoubtedly get your business included for the state as well as central government business plans.
Benefits of Udyam Registration is as follows :
- Protection : The entrepreneur will get assurance against defer in payment.
- Guarantee free loans : You can avail benefit guarantee free credits from the bank.
- Octroi benefits : The entrepreneur can profit from octroi benefits.
- Rate of interest : Rates of interest from the banks can be reduced
- Concession in electricity bills : The entrepreneur who is registered with Udyam registration can get a concession on electricity bills.
- Interest on OD : Exception of 1% interest rate on Overdraft.
- Subsides : Can avail subsidies from NSIC and Qualified for IPS subsidy.
- Reimbursement : Can avail reimbursement for getting the ISO certificate.
- Reservation benefits : Reservation of items for selective manufacturing by MSME and SSI.
- Direct tax : Exception under direct tax regulations.
- Bank mortgage : Appreciate simple bank mortgages.
- International affairs : Can be a part of Global business fairs.
- Benefits for States and Union territories : States and UT regions have their own packages of facilities and incentives.
Whoever deliberately misrepresents or attempts to suppress the facts in the Udyam registration will be punishable. In the event of first conviction, punishable with fine which might extend to Rs.1000/ – if subsequent conviction with fine to which shall not less than Rs.1000/ – and may extend out to Rs.10,000/ –
- Do PAN and GSTIN are compulsory for UDYAM registration?
Government has given relaxation to entities that don’t have a PAN or GSTIN until 31/03/2021. They can take registration on self-declaration up to 31/03/22021 and from thereafter, PAN and GSTIN will be obligatory.
2. Can more than one UDYAM registration with the same PAN?
One can not take more than one UDYAM registration with the same PAN.
3. How to correct /update details in the UDYAM registration previously taken?
An enterprise having a UDYAM registration number can correct /update its data through the UDYAM registration portal.
3. What number of NIC codes can be added to one UDYAM registration?
Maximum of NIC codes can be included in one UDYAM registration.