After China, India has the world’s largest MSMEs (Micro, Small, and Medium Enterprises). MSMEs play an important role in the country’s economic and social development by encouraging innovation, entrepreneurship, job creation, exports, and inclusive growth.
According to the National Statistical Office, the MSME sector contributed 30.3 percent of the country’s total GDP in 2018-19. The Indian government has long prioritized the sector’s growth and development, and one recent endeavor was the introduction of udyog aadhar registration for MSMEs, which will take effect on July 1, 2020, and expedite the MSME registration process from UAM to EM-II (old process).
This article explains the Udyam Registration procedure and regulations, which apply to (new and current) MSMEs, as well as the revised MSME classification definition.
Beginning July 1, 2020, all businesses will be classified as MSMEs.
The Micro, Small, and Medium Enterprises Development (MSMED) Act, which was notified in 2006, establishes the legal framework within which a business can be designated as an MSME. This act attempts to support the development of these enterprises as well as boost their competitiveness through a variety of plans, privileges, and other incentives provided by the Indian government.
The Micro, Small, and Medium Enterprises Development (MSMED) Act, which was notified in 2006, establishes the legal framework within which a business can be designated as an MSME. This act attempts to support the development of these enterprises as well as boost their competitiveness through a variety of plans, privileges, and other incentives provided by the Indian government.
The advantages of registering as an Udyam (Enterprise)
Although the governing statute does not make MSME registration necessary, it is frequently required for the purpose of complying with and disclosing the requirements of other regulating acts such as the Companies Act 2013. However, an enterprise (Udyam) that is established under the abovementioned Act would be able to take advantage of the benefits and privileges that the government has announced at the time.
By registering with the Udyam Registration Portal, MSME businesses can benefit from the stimulus package’s collateral-free automatic loans, E-market linkages across the board to provide marketing opportunities, protection against late payments on materials/services supplied, financial assistance at lower interest rates, tax rebates, and preferential treatment when issuing.
The Udyam Registration Process
An Enterprise (Udyam) must register by following the steps below:
Anyone who wishes to start a micro, small, or medium business can apply for Udyam Registration online, which is based on self-declaration and does not involve the upload of any paperwork, papers, certifications, or proof.
Unlike the UAM / EM-II, which required renewals, the new Udyam Registration is a one-time registration for an MSME.
In the Udyam Registration portal, there is a simplified registration form. When a firm obtains a GSTIN, the name, address, and bank information of the company are obtained from the GST portal.
For Udyam registration, an Aadhaar number will be required. The proprietor’s Aadhaar number, in the case of a proprietorship firm, the controlling partner’s Aadhaar number in the case of a partnership firm, and a Karta’s Aadhaar number in the case of a Hindu Undivided Family number in the case of a Hindu Undivided Family’s Aadhaar number in the case of a Hindu Undivided Family’s Aadha (HUF). If the organization is a company, a limited liability partnership, a cooperative society, a society, or a trust, the GSTIN and PAN, as well as the Aad, must be submitted by the organization or its authorized signatory.
A permanent identifier known as the “Udyam Registration Number” will be assigned to an entity (referred to as “Udyam” on the Udyam Registration page) after registration.
Following the completion of the registration process, an e-certificate titled “Udyam Registration Certificate” will be issued.
Any information gaps from earlier years when the entity did not have a PAN must be filled out on a self-declaration basis if the entity is correctly registered as an Udyam with a PAN. No company can have more than one Udyam Registration, however, a single Udyam Registration can have many activities stated or added to it, including manufacturing, service, or both. Control Rooms operating in various institutions and offices of the Ministry of Micro, Small, and Medium Enterprises, including the Development Institutes (MSME-DI) and District Industries Centres (DICs), would serve as Single Window Systems for facilitating the registration process.
Suggested Read- Udyam Registration form
Existing EM-II or UAM enterprises can re-register under Udyam
Every current EM–Part–II or UAM-registered firm must re-register on the Udyam Registration portal by July 1, 2020. All businesses that were registered before June 30, 2020, would be reclassified, according to the notice made on June 26, 2020. Existing businesses will only be valid until 2022 if they were founded before June 30, 2020. Any firm that is registered with another Ministry of Micro, Small, and Medium Enterprises agency must also register with Udyam Registration.
After receiving the Udyam Registration Number, the business must update its information online on the Udyam Registration site, including the contents of the preceding financial year’s ITR and GST Return, as well as any other information that may be necessary, on a self-declaration basis. If the essential information is not updated within the timeframe indicated on the Udyam Registration portal, the enterprise’s status will be suspended. The categorization of the business will be updated based on information provided or received from government sources such as ITRs or GST returns.
