Introduction
Micro, Small, and Medium Enterprises play a very important role in strengthening the Indian economy. However, running a Small or medium-sized enterprise means facing many challenges, some of which are the problem of not getting finance or being unable to establish the business in the competitive market. Looking at all these difficulties, to solve the problems of the entrepreneurs and business owners who come under the classification of MSMEs, the Government of India introduced Udyam Registration, which is an online registration process for Micro, Small, and Medium Enterprises. Udyam Registration brings many benefits, some of which include getting access to government schemes, getting financial assistance, and getting tax exemption. Apart from this, the credibility of the business also increases.
In this blog, we will cover all aspects of Udyam Registration, what its benefits are for the MSMEs businesses, and how they can register their business without any hassle.
What is the meaning of Udyam Registration?
Udyam Registration is an online process started by the Ministry of Micro Small and Medium Enterprises, Its sole purpose is to provide a unique identity to the business and enable them to get government benefits. Before Udyam Registration, there used to be the Udyam Aadhar system, It was replaced by Udyam Registration, which is a fully digitalized and online process. It is a paperless process and its basis is self-documentation.
Who needs Udyam registration?
All the businesses that fall under the category given below can apply for Udyam registration:
- Micro business: Investment of Rs 1 crore & turnover of Rs 5 crores.
- Small Business: Investment of Rs 10 crores & turnover of Rs 50 crores.
- Medium Business: Investment of Rs 50 crores & turnover of Rs 250 crores.
However, the classification of MSMEs given above has changed in Budget 2025; now, there is a new classification.
- Micro business: Investment of Rs 2.5 crore & turnover of Rs 10 crores.
- Small Business: Investment of Rs 25 crores & turnover of Rs 100 crores.
- Medium Business: Investment of Rs 125 crores & turnover of Rs 500 crores.
Whatever government schemes, subsidies or financial assistance are available only for Udyam-registered MSMEs, if MSMEs want to avail the benefits for their business, then Udyam registration is mandatory for them.
Simple Benefits of Udyam Registration
Udyam registration is not just a certificate but a way to get multiple advantages for businesses, and it empowers small-scale businesses and helps them to flourish in this competitive environment. Let us now explore the major benefits of registration in more detail.
Access to government schemes and subsidies
The government provides a lot of financial aid and support to uplift all sectors, one of which is for the MSME sector. The government has launched many schemes for the MSME sector, which reach them only when their businesses are registered through the Udyam registration portal. Some of the schemes are given below:
- Credit Linked Capital Subsidy Scheme for upgrading technology
- Prime Minister Employment Generation Program for reaching the Financial Code
- MSME Competitive Lean Manufacturing Scheme for increasing efficiency and capacity
- Mudra Yojana Scheme, under which loans are available at subsidized rate
- 50% rebate is available on patent and trademark registration fees.
Easy availability of bank loans at low interest rates
A collateral-free loan is available to MSMEs from banks or other financial institutions under Credit Guarantee Fund Transfer to Micro and Small Enterprises. Benefits included under this scheme.
- If compared, registered MSMEs charge lower interest rates than regular business loans.
- Loan approval is also done quickly due to priority sector lending. So minimal documents are required for the loan, and it reduces the credit risk.
Benefits in Income Tax and GST
The registered MSMEs get relief from many taxes. Some benefits are given below:
- Exemption of indirect tax under the Income Tax Act
- Businesses having a GSTIN number help to reduce tax liability.
- Concession in excise duties is also available.
Protection against delayed payment
Small businesses often face delays in receiving payments from their buyers and customers. To overcome these challenges, the MSME Development Act was introduced in 2006, under which Udyam-registered MSMEs get various types of facilities such as:
- Legal protection to recover the due amount.
- If defaulters do not pay the payment for 45 days or more, they have to face penalties.
- There is an online portal called MSME Samadhan to resolve disputes. Where MSMEs can file against buyers if they get payment late.
Improves the credibility of the business
After getting Udyam registration done, the credibility of the business and, along with it, the trustworthiness also increases. It includes benefits
- Reputation in the market is further enhanced.
- There may be a better chance of collaborating with larger enterprises.
- After the trust of the customer increases, the business can grow even more.
Government tenders and contracts
Some government contracts are exclusively reserved for MSMEs. Apart from this, the Government of India gives preference to Udyam-registered MSMEs in public procurement, which includes all these benefits:
- Udyam-registered MSMEs become eligible for those tenders that are exclusively for MSMEs
- The exemption is received in earnest deposit money and tender fees
- MSMEs get preference at the time of procurement contract with Government departments
Trademark and patent registration at subsidized rates
If businesses want to protect their intellectual property rights, Udyam registration provides them
- 50% subsidy is available for Patent registration fees
- Discount is available in trademark and copyright application
- Government support is received in the enforcement of intellectual property rights
Reimbursement in ISO certification
If Udyam-registered MSMEs obtain ISO certification for their products and certificates, they can claim reimbursement of the certificate cost. Apart from this, they can ensure quality assurance and global competitiveness of their products.
Getting facilities for international expansion
Udyam-registered businesses get access to:
- Export promotion schemes and incentives
- If there are international trade fairs or buyer-seller meets, Udyam-registered MSMEs learn new business ideas and technology from these meetings
- Financial aid is received if the business wants to expand globally
Women entrepreneurs get special support
As this is a new era and women are being empowered even more in it, MSME schemes are specially made for women-led businesses like
- Women Entrepreneurship Platform
- Trade Related Entrepreneurship Assistant and Development Scheme
- Subsidies, loans, and financial aid for women entrepreneurs
Step-by-step guide for getting Udyam registration
Udyam registration is a very simple online process and by following the steps given below, you can easily get Udyam registration of your enterprises.
Step 1: First of all, go to the official Udyam Registration portal
Step 2: After opening the website, a Udyam registration form will appear on your screen. Please fill in all the details asked in the form correctly.
Step 3: Fill in your basic/personal information in the form like
- Applicant’s name
- Applicant’s mobile number
- Applicant’s email ID, PIN code
- Select the state from the drop-down box.
- Select your district from the drop-down box.
- Select your gender from the drop-down box.
- Select the social category you belong to from the drop-down box.
- Select the physically handicapped option from the drop-down box.
Step 4 Fill in the form with your business information like
- Name of your business
- Date of commencement of the business
- Address of the business office
- Type of your organization. Select it from the drop-down box
- Main business activity of your enterprise, like manufacturing, service provider, and trade. Select it from the drop-down box.
- Investment you have made in your business
- Annual turnover of your business.
- Numbers of employees in your business
- If you want to give additional information about your business, fill in the given box.
Step 5: Some information related to documents and bank has been asked, fill it in the form like
- Aadhar number
- PAN card number
- GSTIN number
- Bank name
- Bank account number
- IFSC code
Step 6: You will see the verification code on your screen, please fill it correctly in the box given below.
Step 7: Click on Terms and Conditions, then click on Declaration, and finally click on Submit Application.
After applying, you will directly reach our payment gate. After making an online payment, you will get a verification message of OTP, validate that OTP, and finally, you will get a confirmation mail that your Udyam registration has been done successfully. And you will receive the Udyam registration number on your registered email ID within 24 hours.
There are some misconceptions about Udyam registration.
The simple benefits of Udyam registration are mentioned above, but apart from this, there are some misconceptions about Udyam registration. Let’s clarify it.
Is it compulsory for every business?
No, it is not so at all; it is necessary only for those MSMEs who want to avail the advantages of Udyam registration which are provided by the Government.
Is the process of getting Udyam registration very lengthy?
No, it is not so at all; this process is completely online, and you only have to fill out the Udyam registration form, which only takes some of your time.
Are a lot of documents required to get a Udyam registration Number?
For Udyam registration, only Aadhaar, PAN, bank details, and basic details of your business are required.
You Can Apply for Udyam Certificate with Annexure Through Udyam Portal
Is Udyam registration a free service?
If you get Udyam registration done for your business with the help of a private consultancy, then you have to pay some nominal charges.
Udyam Registration has become essential for MSMEs who want to expand their business further, get financial benefits, and establish the credibility of their industry. Because of Udyam Registration, MSMEs can get government support, financial incentives, and legal protection, due to which Udyam Registration has proved to be a game changer for Indian entrepreneurs.