7 FAQs on Udyam registration online

Udyam registration online
What is the classification of MSMEs
What is the eligibility of Udyam registration
benefits of Udyam Registration for MSMEs
apply for Udyam registration online
Who can apply for Udyam Registration
What are the key features of Udyam Registration
What are the documents required for MSME Registration

If you are a MSME business owner, then you are likely familiar with the Udyam portal. If not, this article will answer 7 FAQs on Udyam registration online to enable you to learn more about the Udyam portal and why it is beneficial for MSME businesses in India.

Quite naturally, there are many questions that people have on the Udyam portal, especially on how to register on Udyam? How to get the Udyam e-Certificate? Who is eligible for Udyam registration?

We will answer 7 frequently asked questions on applying for Udyam registration online to enable you to know more about the Udyam portal.

What is the Udyam portal?

The Udyam registration portal was launched by the government of India on July 1, 2020, to boost the Micro, Small & Medium Enterprises (MSMEs) sector of India. This online portal facilitates MSME business owners to register their businesses and avail the benefit provided by the government to this sector.

This e-certification provided by the government replaced the Udyog Aadhar process. Once you register on the Udyam registration portal, you will be provided with a unique identity number along with a recognition certificate. The Udyam certificate will certify your enterprise as an MSME unit.

7 Frequently asked questions (FAQs) on Udyam registration online

There are 633.9 lakh MSMEs registered in India (Source: IBEF). The Micro sector accounts for over 99% of the country’s MSME population and includes 630.5 lakh enterprises. The Small sector includes 3.3 lakh enterprises while the medium sector includes 0.05 lakh enterprises. MSMEs contribution to India’s GDP is close to 30%, while that in the manufacturing output is around 45%, and around 48% of the country’s exports.

On that note, let’s understand more about the online Udyam registration process.

1. What is the classification of MSMEs?

As per the Micro, Small and Medium Enterprises Development (MSMED) Act of 2006 definition, all enterprises in the manufacturing and service categories were considered as MSMEs. The aim of this classification was to help businesses avail various government benefits and get access to multiple government schemes and promotions.

On 2 July 2021, Union Minister, Nitin Gadkari, through an amendment announcement, revised the definition for Micro, Small and Medium Enterprises. Under the new definition of MSMEs in India, both wholesalers and retailers are brought in under the classification of MSMEs. Therefore, all the benefits that were earlier open to MSMEs are now open to wholesalers and retailers as well. There are about 2.5 crore wholesale and retail traders who are expected to benefit from this amendment.

New definition of MSME based on investment amount and turnover of the enterprise
Category	Investment limit (in ₹)	Turnover limit (in ₹)
Micro	1 Crore	5 Crore
Small	10 Crore	50 Crore
Medium	50 Crore	250 Crore

2. What is the eligibility of Udyam registration?

Another commonly asked question is – Who is eligible for MSME registration?

The only criteria for eligibility for Udyam registration is that the enterprise must be either micro, small or medium entities.

Primarily, if your business fulfils the criteria mentioned above, you can register on the Udyam portal. Both enterprises in manufacturing and the service sector including wholesalers and retailers are eligible to apply. The sole aim of this registration is to encompass a wide segment of business and to ensure that they are eligible for the benefits offered by the government and grow their business.

Any business, including eCommerce business can register on Udyam as an MSME provided they meet the basic eligibility criteria.

3. What are the benefits of Udyam Registration for MSMEs?

The next question asked is – What are the benefits of registering on Udyam as an MSME?

Some of the key benefits of MSME registration include the following. You can also visit the Udyam website to know more about the benefits. You can even access the same in in regional languages of India for better understanding.

Finance facilities from banks without collateral requirements
Central government development schemes
Subsidies and government schemes for specific industries
Reservation in making of certain products by MSMEs only
Concession on bank interest
Concession on taxation
Protection against delayed payments (e.g., programmes like MSME Samadhaan)
Preference in government tender process
Stamp duty benefits
Concession in electricity bills and trademark registration
Reimbursement of ISO Certification expenses
Facility for foreign business expo
Upgradation of technology used
Capital grant for infrastructure development

Factsheet of MSME (Udyam) Registration
Total Registration	Total Classified	Micro	Small	Medium
1,29,53,453	1,28,80,293	1,24,06,74	4,33,782	39,766

Source: Udyam registration platform

4. How to apply for Udyam registration online?

Another frequently asked question is – How to register on Udyam online?

It’s a simple procedure and requires only your Aadhaar number to get started. You can follow the steps given below to register for Udyam online:

Step 1: Visit the Udyam portal to register your business.

Step 2: Click on the ‘For new entrepreneurs who are not registered yet as MSME or those with EM-II’ option on the homepage.

Step 3: Enter your Aadhaar number and enter the OTP received on your registered mobile number.

Step 4: Click on the ‘Validate’ button to validate your Aadhaar number.

Step 5: Next, validate the PAN card followed by enterprise type and PAN number. This will validate your PAN card.

Step 6: Enter the details such as the name of the entrepreneur, mobile number, name of the enterprise, location of the plant/unit, address of the enterprise, status of enterprise, bank details, the activity of the unit, NIC code for business and number of persons employed in the Udyam registration application form that will open.

Step 7: Enter details on investment related to plant and turnover and then select the declaration. Click ‘Submit and Get Final OTP’.

Step 8: Enter the OTP to submit the form. You will get the Udyam e-registration certificate through email on your registered email id.

Step 9: You can also print a copy of your Udhyam registration or verify the validity of Udyam Registration by directly visiting the Udyam Registration verification link available on their website.

5. Who can apply for Udyam Registration?

The eligibility for MSME registration depends on the annual turnover and investment of the enterprise as per the revised definition for Micro, Small and Medium Enterprise.

All industries under manufacturing, service, wholesale, and retail trade that fulfil the classification criteria of annual turnover and investment for enterprises can apply for MSME registration. You can also check the list of MSME businesses to understand if your business falls under the basic definition of MSMEs or not.

The enterprises eligible for MSME registration on Udyam include:

Individuals, startups, business owners, and entrepreneurs
Private and public limited companies
Sole proprietorship
Partnership firm
Limited Liability Partnerships (LLPs)
Self Help Groups (SHGs)
Co-operative societies
Trusts

6. What are the key features of Udyam Registration?

Another frequently asked question is on the main features of the portal. Some of the features that distinguish the portal are:

A permanent Udyam registration number is provided once you complete the registration process.
The entire registration process is carried out online.
Renewal of registration not required.
The entire process of Udyam registration involves zero cost.
The MSME registration portal is integrated with income tax and GSTIN systems.
A single enterprise can file only one registration.

7. What are the documents required for MSME Registration?

The basic documents that are required for MSME registration include:

Aadhaar card
PAN card

Details relating to PAN and GST-linked investment and turnover of enterprises will be taken automatically by the Udyam Registration Portal from the government databases as the portal is integrated with Income Tax and GSTIN systems.

The exhaustive list of documents that you may keep handy while applying for Udyam registration include the following:

Registered mobile number
GST certificate and copy of passbook
List of male and female employees employed
Financial statements or audit reports of the business
Partnership deed, if any
Articles of association
Memorandum of association

In addition to the above documents, it is necessary for enterprises to have a NIC code for Udyam registration. The National Industrial Classification Code (NIC) is a classification scheme that is supplied by the government to track business activities of MSME businesses. You need to provide your NIC code while registering for Udyam.

To sum up:

The role of the MSME sector in rural sectors and urban India is tremendous. And not surprisingly, the government is introducing several schemes and policies to boost the sector. The Udyam MSME certificate is an attempt to recognise businesses as MSMEs and provide them with the required support for growth.

As an entrepreneur, you must register your business on the Udyam registration portal and to avail various MSME benefits provided by the government. The entire process is paperless and there is no coast involved. Your registration also helps the government to collect data on the MSME sector of India based on the product category and the size of the enterprise along with the investment and turnover.

To learn more about the MSME sector in India and find MSME growth opportunities, register your business on Tata nexarc – a B2B growth platform to enable emerging businesses in India find new opportunities to grow their business seamlessly.

Note: This article has been updated on 03 April, 2023.