Benefits of Udyam Registration
Collateral Free Loans from Bank
The Credit Guarantee Fund Scheme (CGS) for Micro and Small Enterprises was launched by the Government of India to make available collateral-free credit to the micro and small enterprise sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme, both the old as well as the new enterprises can claim the benefits.
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Easy Clearance of Pending Payments
Under the MSME registration benefits, a buyer is expected to make a payment for the goods/services within 15 days of the purchase. If the buyer delays, the payment for more than 45 days, the enterprise is eligible to charge compound interest which is 3 times the rate notified by RBI. At times, the buyers of services or products from the MSME’s or SSIs tend to delay the payment. The settlement of such disputes must be done in minimum time through conciliation and arbitration.
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Overdraft Facility with Interest Exemption
Businesses or enterprises registered as MSME/SSI under the MSME Act are eligible to avail a benefit of 1% on the overdraft as part of the Credit Guarantee Trust Fund Scheme although this may vary from bank to bank.
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50% discount on trademark and Patent Fees
Business enterprises registered under the MSME Act are given a hefty subsidy of 50 per cent for patent registration. This can be availed by sending an application to the respective ministry. In addition to this, one of the great MSME registration benefits is to get subsidy for industrial promotion suggested by the Government.
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Some Concession on Electricity bills
A business with Udyam Registration can avail concession on electricity bills. Registered MSME have to submit the bill along with the application and copy of registered Certificate.
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Reimbursement of ISO Certification charges
Registered MSME‘s can claim the expenses for reimbursement that were spent on ISO certification.
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Udyam Registration Online
Documents Required for Udyam Registration
- Business Address Proof Electricity / Telephone bill of the Registered Office
- GST Certificate GST Registration Certificate (If Registred)
- PAN Card PAN Card Copy of Entity
- Proof of Entity Partnership Deed/ MoA and AoA
- PRC (for Schedule III) For firms that are listed in Schedule -III of the Industrial Licensing Exemption Notification, no Industrial license is needed. Every other enterprise must obtain it for the PRC (Provisional Registration Certificate) application.
- Statutory Administrative Clearences For the registration and document process, all statutory and administrative clearances need to be obtained such an NOC from pollution board to prove that no restrictions are being violated.
Eligibility for Udyam Registration
Eligibility for Udyam (MSME) registration is depending on the scale of business of the enterprise. Udyam registration is applicable for Proprietorship, One Person Company, Partnership Firm, Private Limited Company, Public Limited Company, Producer Company, Limited Liability Partnerships, Co-operative Societies, Hindu Undivided Families (HUF) or any association of Persons or any other undertakings, which are eligible for counted under Micro, Small and Medium Enterprises.
Micro Enterprise
An enterprise whose investment in Plant, Machinery and Equipments does not exceeds One Crore and turnover does not exceeds Five Crores is a Micro Enterprise.
Small Enterprise
An enterprise whose investment in Plant, Machinery and Equipments does not exceed Ten Crores and turnover does not exceed Fifty Crores is a Small Enterprise.
Medium Enterprise
An enterprise whose investment in Plant, Machinery and Equipment does not exceed Fifty Crores, and turnover does not exceed Two Hundred and Fifty Crores is Medium Enterprise.
Register Online
Register for Udyam (MSME) in 3 Easy Steps
- Fill up the registration form
Select any package suits your requirement
Fill up the form which will take less than 10 minutes
Make payment through secure payment gateway.
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Provide details & upload documents required for Udyam (MSME) registration
Review of Documents and Information provided
Application for Udyam (MSME) Registration
- Your Udyam Registration Certificate Generated
All this in 15 – 20 working days*
*Subjected to Government Processing Time
The Process of Registering for Udyam (MSME)
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Day 1 – 4
Collection of Information
Collection of required documents (Scanned Copies)
- PAN cards
- Rental agreement for the office address (if rented)
- Electricity bill
- Identity and address proofs of the proprietor/partners/directors
- For private limited companies:
Memorandum and Articles of Association
Form 32
Form 18
Certificate of incorporation
- For Partnerships:
Partnership agreement
Review of documents and information provided
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Day 4 – 6
Application for Udyam submitted with collected documents
In some states additional paperwork may be needed like sale bill of Machinery and Municipal Clearance, etc.
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Day 7 – 20
Government Processing Time
In normal cases your Udyam Registration Certificate will be ready after 5 – 10 days of submission of application
If production is not begun/ business is not commenced a provisional certificate will be issued for 5 years. It become permanent when the unit is functioning.
Enquiry
FAQ
For how long a Provisional Registration Certificate (PRC) is valid?
A PRC is valid for 5 years from the date of issuance. You have to re-apply for PRC if the unit is not yet operational. If the unit exceeds the investment limit set by the Micro Small Medium Enterprises Development (MSMED) Act, you won’t be eligible for Udyam Registration.
What factors are not counted as Investment while considering eligibility for Udyam (MSME) registration?
For a registration, total plant and machinery cost should be up to Rs. 25 crore for manufacturing units and Rs. 10 crore for service units. While calculating this number, the value of land and building will not be counted toward the total investment. Also, the original cost of the equipment and plant and machinery is taken into account. Depreciation cannot be factored in.
How does MSME (Udyam) Registration help me get a loan from a Bank?
All financial institutions including Major Banks recognize MSME and have decided special schemes for them. MSME are eligible for priority sector lending. This increases the likelihood of you being granted a loan considerably. Major Indian Banks also provide loans to MSMEs at lower interest rates. You may also expect to get preferential treatment in case of any future delay in repayment.
What benefits for a registered MSME from State and Central Government?
Most states offer businesses registered MSMED Act a subsidy on power, taxes, and entry to state-run industrial estates. In particular, there is a sales tax exemption in most states and purchase preferences on goods produced. The Central and State Governments provide certain important benefits to MSME in the initial years of business. Exemption in excise and certain direct taxes are just to name a few.