Udyam Registration
Simply put, Udyam registration is an initiative by the Government of India to register and classify MSMEs in the country. The Ministry of Micro, Small, and Medium Enterprises (MSME Ministry) facilitates this process.
This is a great way to simplify registration and make business opportunities more accessible for everyone. More importantly, the registration can be a game changer for business owners looking to access necessary financial initiatives.
The Udyam certificate replaced the conventional approach to registration, which was more complicated. With the new approach, the registration process becomes quite simple, and you can easily access many legal and tax-related perks.
Why was Udyam introduced?
Micro, small, and medium enterprises (MSMEs) are significant to India’s growth. As India’s GDP aims at a $5 trillion economy, experts predict the MSME sector will be worth Rs.1 trillion by 2028. However, MSMEs face challenges like limited access to affordable credit and heavy compliance burdens. To address these issues, the government has introduced reforms to improve the ease of doing business. One key measure is the Udyam Registration Certificate, which replaced the Udyog Aadhaar Registration/Memorandum (UAM). The Udyam aadhar registration simplifies MSME registration with a self-declaration-based, entirely online, paperless, and cost-free process. The MSME Ministry created MSME Udyam Registration to classify MSMEs and provide them with benefits. With Udhyam registration online, the registered organizations will automatically appear in other government databases with the company’s PAN, GST, and IT data.
Udyam Registration is mandatory for MSMEs, ensuring proper recognition and integration into various Government schemes and benefits. Here are the details of the benefits that come along with the registration:
Access to Government Schemes/Subsidies:-
Udyam registration provides easy access to government schemes and subsidies. The government comes with so many schemes that subsidize small business these include credit-linked capital subsidies, skill development programs, export promotion assistance, and reimbursement for ISO certification and patent registration and for access that schemes businesses must have Udyam Certificate.
Official recognition of Business:-
Udyam registration provides official recognition for Business that enhances the credibility of Business for customers and as well as investors. That recognition is going to help them in collaboration with other businesses.
Loan with less collateral and low Interest rate:-
Udyam registration provides easy access to finance. Udyam certified Business find it easy to secure a loan from Banks and other financial Institutions. Generally that loan has lower interest rates and also very less collateral required. That allows them to manage working capital and expand their business
Protection against delayed payment:-
Udyam registration protects small businesses from delayed payments by larger businesses. The government has come up with a mechanism to protect MSMEs from delayed payments by larger businesses. That helps MSMEs to have good financial stability and mentioned better cash flow.
Small Business registered under Udyam Certification is given preference in government tenders. That makes it easier to get contracts from platforms like E-Marketplace. That can help them to secure a valuable contract and boost their revenue.
Tax Benefits and Exemptions:-
MSMEs registered with Udyam can carry forward (MAT) Minimum Alternate Tax up to 15 years (earlier which was only 10 years and) get rebates on direct taxes. That will reduce the operational cost of business.
Rebate from State Government:-
Small Business registration with Udyam gives access to rebates by both the Central Government and State Government. That rebates going to save more on setting up the business. There is some state government offering subsidies on electricity bills for Udyam registered businesses that’s going to help to reduce operational cost.
Simplified Tax and Compliance-
Udyam registration makes tax filing and regulatory compliance easy, especially when databases integrate with GST and PAN. Being a registered MSME helps in financial tracking, better organization and also better coordination with tax consultants
Support available for Diverse Business Types
Udyam Registration inclusively covers proprietorships, partnerships, (HUF) Hindu Undivided Families, trusts and societies and also manufacturing service retail and wholesale This wide range of eligibility ensure that all small businesses, including startups and women/ST/SC entrepreneurs, can be benefited. This scheme provides loans up to Rs2 Crore for first-time entrepreneurs
