MSME / UDYAM Registration

Registering your business as an MSME Udyam unlocks numerous opportunities, ensuring a strong foundation for your entrepreneurial journey.

MSME & Udyam Registration

Unlocking Opportunities for Indian Entrepreneurs

Starting a business in India can be overwhelming, especially when it comes to understanding the legal requirements and registration processes. Fortunately, the Indian government has introduced MSME (Micro, Small, and Medium Enterprises) and Udhyam registration services to simplify the process for entrepreneurs.

Now, entrepreneurs can access financial assistance, government schemes, and tax benefits, enhancing their chances of success.

Types of MSME Registrations

Understanding the difference

Provisional MSME Registration: Also known as Entrepreneur Memorandum Part-II (EM-II) registration, this is a temporary registration provided to new enterprises during the establishment process. It allows them to avail certain benefits and facilities while their permanent registration is being processed. Provisional MSME registration is valid until the enterprise begins its commercial production.

Permanent MSME Registration: This is the final and long-term registration obtained by fully established and operational enterprises. It is also known as Udyam registration, replacing the earlier Udyog Aadhaar Memorandum (UAM) system. Permanent MSME registration provides businesses with a unique identification number and various benefits and incentives offered by the government.

Benefits of MSME & Udyam Registration

Unlocking Opportunities for Small Businesses

Small businesses play a vital role in driving economic growth and creating employment opportunities. In order to support and encourage their development, the Indian government has introduced registration schemes like MSME (Micro, Small, and Medium Enterprises) and Udhyam. These registration programs offer a range of benefits to registered enterprises, helping them thrive in a competitive market. Let’s explore some of the key advantages of MSME and Udhyam registration.

Access to Credit and Financial AssistanceBy obtaining MSME or Udhyam registration, businesses become eligible for various loan schemes and credit facilities offered by financial institutions. These loans come with lower interest rates and favorable repayment terms, enabling enterprises to effectively manage their finances and fuel growth.
Government Schemes and SubsidiesRegistered MSMEs and Udhyam enterprises can take advantage of numerous government initiatives designed to support business growth and development. Programs such as the Prime Minister's Employment Generation Programme (PMEGP) and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provide subsidies, grants, and incentives to registered businesses, fostering an environment conducive to their success.
Tax Benefits and ExemptionsMSME and Udhyam registered businesses enjoy tax benefits and exemptions under various government regulations. These include reduced rates of interest on delayed payments, eligibility for industrial promotion subsidies, and exemptions on certain direct and indirect taxes. Such tax advantages help enterprises save money and allocate resources more efficiently.
Enhanced Market OpportunitiesRegistering under MSME or Udhyam opens doors to procurement opportunities from large-scale industries and government agencies. Many public and private entities prefer to source goods and services from registered enterprises, as it provides them with increased market visibility and potential collaborations. This exposure can lead to significant business growth and expansion.
Priority Sector LendingBanks and financial institutions are required to allocate a certain percentage of their lending to priority sectors, which include MSMEs. By obtaining MSME or Udhyam registration, businesses gain priority access to these lending facilities. This preferential treatment makes it easier for enterprises to secure the necessary capital for growth and expansion.
Simplified Patent and Industry SetupMSME registration in India not only reduces the cost of obtaining a patent or setting up an industry but also provides rebates and concessions. These benefits make it more affordable for entrepreneurs to protect their innovations and establish their ventures, thereby fostering a culture of innovation and entrepreneurship.
Government Tenders and E-marketplace AccessMSME registration enables businesses to easily acquire government tenders through integration with platforms like the Udyam Registration Portal, Government e-Marketplace, and various State Government portals. This integration grants registered enterprises convenient access to government marketplaces and e-tenders, opening up new avenues for business growth.

In addition to these benefits, MSME and Udhyam registration offer advantages such as a one-time settlement fee for non-paid amounts, eligibility for government schemes, priority sector lending, waiver of security deposits for e-tenders, and concessions in electricity bills. These incentives and concessions provide a favorable ecosystem for small businesses to flourish.

Furthermore, registered enterprises receive special considerations in international trade fairs, fast resolution of disputes, subsidies for barcode registration and ISO certification fees, and exemption schemes from direct taxes. They also enjoy a 50% discount on government fees for trademark and patent filings. These additional benefits serve to further strengthen the competitive position of MSMEs and Udhyam-registered businesses.

MSME Classification

Here are the revised limits for MSME classification:

The MSME definition in India underwent a revision as part of the Atmanirbhar Bharat package announced on 13th May 2020. This revision aimed to include more units under the purview of the schemes introduced. The revised MSME definition considers both investment and turnover as composite criteria, and the limits have been increased. Furthermore, the distinction between the service and manufacturing sectors has been eliminated.

For Manufacturing and Services	Investment	Turnover
Micro Enterprises	Less than Rs. 1 crore	Less than Rs. 5 crore
Small Enterprises	Less than Rs. 10 crore	Less than Rs. 50 crore
Medium Enterprises	Less than Rs. 20 crore	Less than Rs. 100 crore

Documents Required

To facilitate the MSME registration process, the government has streamlined the documentation requirements.

For MSME registration, no documents need to be uploaded. The PAN and GST-linked details will be fetched automatically from government databases. Only the Aadhaar number is required for:

ProprietorshipAadhaar number of the proprietor
PartnershipAadhaar number of the managing partner
HUF (Hindu Undivided Family)Aadhaar number of the Karta

For Companies, LLPs, Societies, Cooperative Societies, and Trusts, PAN, GSTIN, and Aadhaar numbers of the authorized signatory or organization are needed.