What is Udyam Registration?

UDYAM REGISTRATION

What is Udyam Registration?

Udyam registration is a new system introduced by the Ministry of Micro Small Medium enterprises to assign status of micro, small or medium to enterprises in India. Government has various schemes & plans for development of MSME. Hence to implement these schemes & plans government need to verify the status of enterprises. 

Hence by introducing Udyam registration system, government can easily identify the updated status of enterprise. Whether fall under micro, small or medium category & accordingly provide the benefit to enterprise.

Hence we can say in simple words Udyam registration is a system developed by government to identify the updated status of each enterprise.

Why government introduced Udyam Registration?

Udyog Adhaar registration system was being used earlier to register for MSME, which generate registration on self-declaration basis, but after registration there was no change in status of enterprise also no system was available to track the updated status of enterprise. No further information was available after registration.

Hence it was lacking in the following areas:-

1. No updated information available.
2. No status updates functionality on the basis of current position of enterprise.
3. Status allotted at the time of registration remains same even after increase in turnover & investment.
4. No system to track the authenticity of turnover & investment by enterprise.

By introducing Udyam registration system, now: 

1. Status of enterprise will be updated automatically every year.
2. Turnover & investment data will be fetched from income tax return & GST Return.
3. Authenticity of investment & turnover checked automatically.
4. Status of enterprise will be on the basis of authentic data. 

Some important points for Udyam Registration:

1. Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online on the Udyam Registration portal.

2. No documents, papers, certificate or proof required to upload.

3. On successful registration enterprise will be "Udyam".

4. All registered Udyam will be assigned a permanent identity number "Udyam Registration Number".

5. "Udyam Registration Certificate" shall be issued on successful completion of the registration process.

Classification of MSME enterprises under Udyam Registration

An enterprise shall be classified as micro, small or medium enterprise on the basis of following criteria:

Micro	Where the investment in plant & machinery or equipment  does not exceed ONE Crore rupees AND turnover doesn't  exceed FIVE Crore rupees.
Small	Where the investment in plant & machinery or equipment  does not exceed TEN Crore rupees AND turnover doesn't  exceed FIFTY Crore rupees.
Medium	Where the investment in plant & machinery  or equipment does not exceed FIFTY Crore rupees AND turnover doesn't  exceed TWO HUNDRED & FIFTY Crore rupees.

Composite criteria of investment and turnover shall apply for classification of an enterprise as micro, small or medium.

If an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category but shall not be placed in lower category unless it goes below the ceiling limits in both criteria.

All units registered under GST portal for same PAN shall be collectively treated as one enterprises and turnover and investment for all such entities shall be seen together and only the aggregate values will be considered for deciding the category.

What are the documents Required for Udyam Registration?

Udyam registration is based only on adhaar number, totally paperless & online process. Hence no document is required to file on Udyam Registration portal. Only the information are required relating to enterprise.

Points to be kept in mind while doing Udyam registration:

1. No fee is payable for Udyam Registration.
2. Permanent registration number will be allotted.
3. PAN & GST linked detail of investment & turnover will be taken automatically from Government data.
4. PAN & GST number is mandatory from 01st April 2021.
5. Only one Udyam registration for one enterprise. Multiple Udyam registration not allowed.
6. After completion of process an online "Udyam Registration Certificate" will be generated.
7. No renewal is required for Udyam Registration.

Mobile App to Manage Warranty Documents

DISCLAIMER:- THE ARTICLE HAS BEEN WRITTEN BY SUDHIR ARYA, COMPANY SECRETARY IN PRACTICE & STARTUP CONSULTANT. DUE CARE HAS BEEN TAKEN TO ENSURE THE CORRECTNESS OF INFORMATION. IT'S BASED ON THE RELEVANT INFORMATION AVAILABLE AT THE TIME OF WRITING IT. HOWEVER, THIS ARTICLE CAN'T BE CONSTRUCTED AS LEGAL OPINION AND WRITER WILL NOT BE LIABLE FOR ANY DIRECT OR INDIRECT RESULT FROM THIS ARTICLE. THIS ARTICLE IS ONLY FOR KNOWLEDGE SHARING INITIATIVE.

ANY SUGGESTIONS ARE WELCOME TO INCREASE THE EFFECTIVENESS OF THE ARTICLE. FOR ANY QUERY OR SUGGESTION WRITER CAN BE REACHED AT MAILTOSUDHIRARYA@GMAIL.COM OR WWW.SUDHIRARYA.COM