Loan demand for micro, small and medium enterprises (MSMEs) is rising. But how does one register to set up an MSME? For this, the govt had launched an online system called Udyam. Let us know more about it
Udyam is an online system for registering micro, small and medium enterprises launched by the Union MSME Ministry on July 1, 2020. The government had also revised the definition of MSMEs from the same date. More than 88 lakh MSMEs have successfully registered themselves to date through the Udyam registration portal.
Any person can avail of free Udyam registration for their enterprise through a fully digital and paperless process based on self-declaration. Udyam registration is a prerequisite for availing the benefits of schemes or programs of the Ministry of Micro, Small & Medium Enterprises such as the Credit Guarantee Scheme, public procurement policy, additional edge in Government Tenders, and protection against delayed payments, etc.
An e-certificate called the βUdyam Registration Certificateβ is issued online on completion of the registration process. This certificate has a dynamic QR Code through which the web page of the registration portal and details about the enterprise can be accessed.
Aadhaar, PAN, and GST numbers are required for registration. The Udyam portal is seamlessly integrated with Income Tax and GST Identification systems along with the government e-marketplace. The details on investment and turnover are taken automatically from government databases.
The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm, and of a βKartaβ in the case of a Hindu Undivided Family.
In the case of a Company or a Limited Liability Partnership or a Cooperative Society or a Society or a Trust, the organization or its authorized signatory shall provide its GSTIN and PAN along with the Aadhaar number.
Misrepresents or attempts to suppress the self-declared facts and figures appearing in the Udyam Registration or update process are liable to penalty under section 27 of the Micro, Small and Medium Enterprises Development Act, 2006.
No enterprise is allowed to file for more than one Udyam Registration. However, any number of activities including manufacturing or service, or both may be specified or added in one registration.
The registration is permanent and acts as the basic identification number for an enterprise and there will be no need for renewal of registration.
MSMEs also become eligible for priority sector lending from banks. All bank loans to MSMEs conforming to the RBI guidelines qualify for classification under priority sector lending.
