Micro, small, and medium-sized businesses must be registered with MSME in order to benefit from different government initiatives aimed at the industry. Udyam Registration is required for that organization.
What does the term “Udyam Registration” mean?
Udyam Registration, also known as MSME Registration, is a government-issued registration that comes with a certificate of recognition and a unique number and is used to certify small and medium businesses. The main goal of this feature was to deliver the most benefits to Indian medium or small-scale firms or industries that are registered with MSME using their Aadhar Card Number.
Entities eligible for Udyam Registration are either engaged in the manufacture, production, processing, or preservation of commodities or in the provision of services. However, in order to be classed as a medium, small, or micro-enterprise and get MSME registration, a business must meet a set of conditions.
Udyam Registration online
To claim the advantages provided by law and as declared by the government from time to time, eligible MSME units must get a Udyog Aadhar Memorandum (UAM) or Udyog Aadhar Registration Certificate. Once a certificate is issued, it is valid for a lifetime. Any modifications must be made using the notified Udyog Aadhar edit/ Udyog Aadhar Update method. Amendments to Udyog Aadhar, such as name, address of the firm, and change in category, can be made as needed.
MSME Registration Process on the Udyam Portal
The Indian government has taken a variety of steps to address the pandemic’s effects, with a particular focus on small companies. Micro, Small, and Medium Enterprises (MSME) are viewed as a major factor in creating momentum in the economy once movement constraints and social distance conventions are eliminated. It is critical to focus on the expansion and development of the MSME sector in order to support post-Covid economic possibilities.
Section 7 of the Micro, Small and Medium Enterprises Development Act, 2006 (‘Act’) provides the definition of MSME. Based on the Finance Minister’s recommendation, the Ministry of Micro, Small and Medium Enterprises revised the definition of MSME by notification on June 1, 2020, in order to broaden the scope and so include a larger number of businesses. The classification is based on the entity’s investment and turnover, according to the new criteria.
According to the announcement, the most recent definition of MSME is as follows:
- Micro: Not more than Rs. 1 crore in plant and machinery or equipment, and not more than Rs. 5 crores in annual turnover
- Small: Not more than Rs.10 crore in plant and machinery or equipment, and not more than Rs.50 crores in annual turnover
- Medium: Not more than Rs.50 crore in plant and machinery or equipment, and not more than Rs.250 crores in annual turnover
The aforementioned definition eliminates the previously existing division of investment limitations for the Manufacturing and Service industries. As a result, a high number of service providers are projected to be covered, as they tend to invest less in plant and apparatus or equipment and have lower turnover than manufacturing entities with equivalent earnings.
Because the changes in classification will take effect on July 1, 2021, the Ministry of Micro, Small and Medium Enterprises has issued a Notification dated June 26, 2021, outlining a new way of MSME registration.
The aforementioned notification outlines the procedure for registering an MSME, which will take effect on July 1, 2020. The necessity for Udyam Registration will also apply to existing MSMEs.
Following the amendment to the definition of MSME and the introduction of a procedure for filing the memorandum under the Udyam Registration, it appears that registration as an MSME will be a requirement and, as a result, will be considered a prerequisite for benefiting from the Ministry’s various schemes.