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Udyam Certificate (MSME)

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Companies Act, 2013 (India)

The Udyam Registration Certificate includes a permanent registration number and a QR code that provides access to the enterprise’s details. It’s valid for the life of the enterprise and doesn’t need to be renewed.

The Udyam Certificate is a government-issued registration certificate provided to Micro, Small, and Medium Enterprises (MSMEs) in India. This certificate is part of the Udyam Registration process, which was introduced by the Ministry of MSME under the Udyam Registration Portal.

 

 

The Udyam Certificate is an official registration certificate provided to businesses under the Micro, Small, and Medium Enterprises (MSME) sector in India. The registration is a part of the Udyam Registration process, which is facilitated through the Udyam Portal, a government initiative by the Ministry of Micro, Small, and Medium Enterprises (MSME).

Access to Government Schemes and Subsidies

Udyam-registered businesses are eligible for various government schemes and financial assistance programs designed to promote MSMEs, such as subsidies, grants, and easy access to funding.

Priority Sector Lending

MSMEs with Udyam Certification can avail of priority sector lending from banks and financial institutions, offering easier access to loans at lower interest rates, which is crucial for business growth.

Tax Benefits and Exemptions

Udyam-registered MSMEs are eligible for tax rebates, exemptions, and benefits under the Goods and Services Tax (GST) and Income Tax Act, reducing their financial burden.

Protection Against Delayed Payments:

MSMEs are provided legal protection from delayed payments from buyers. This includes the right to claim interest for delayed payments, helping improve cash flow for businesses.

Ease of Doing Business

The Udyam Certificate simplifies business processes by offering easier access to government procurement policies, allowing MSMEs to participate in government tenders and contracts that require MSME certification.

Increased Credibility and Market Visibility:

Registering under Udyam enhances the business's credibility, making it more attractive to potential customers, investors, and partners. It also helps in building trust and visibility in the market.

Eligibility Criteria for Udyam Certificate (MSME)

To be eligible for Udyam Registration and obtain the Udyam Certificate, businesses must meet specific criteria based on their type (manufacturing or service) and size. Below are the key eligibility factors

  1. Business Type
  • Manufacturing Enterprises : Businesses engaged in manufacturing or production of goods.
  • Service Enterprises: Businesses offering services (e.g., IT services, consulting, healthcare, etc.).

      2. Investment in Plant and Machinery/Equipment 

  • The eligibility is determined by the investment made in plant and machinery (for manufacturing enterprises) or equipment (for service enterprises).

     Micro Enterprises

  • Investment in plant and machinery/equipment: Less than ₹1 crore.
  • Annual turnover: Less than ₹5 crore.

     Small Enterprises:

  • Investment in plant and machinery/equipment: Less than ₹10 crore.
  • Annual turnover: Less than ₹50 crore.

     Medium Enterprises

  • Investment in plant and machinery/equipment: Less than ₹50 crore.
  • Annual turnover: Less than ₹250 crore.

      3. Ownership

  • The business should be owned and operated by an Indian entity, i.e., it must be a registered Indian business (individual, partnership, private company, etc.).

      4. Documents Required

  • Aadhar Number:  The business owner’s Aadhar number is required for authentication.
  • PAN Card: A Permanent Account Number (PAN) of the business (if applicable) or the business owner is necessary.
  • Financial Details:Turnover and investment in machinery or equipment must be provided for classification into the appropriate MSME category (micro, small, or medium).

      5. Registration

  • The business must complete the registration process via the Udyam Registration Portal, and there is no registration fee.

       6. Other Requirements

  • If the business is registered under any other name or has multiple branches, each location must be registered separately for Udyam certification.

 

 

Checklist for Udyam Certificate (MSME)

Business Owner Information

  • Aadhar number of the proprietor, partner, or director (mandatory for verification).
  • PAN card of the business owner or the business entity.

Business Details

  • Name of the enterprise.
  • Type of organization (e.g., Proprietorship, Partnership, Private Limited Company, LLP, etc.).
  • Official address of the business, including contact information.
  • Bank account details, including IFSC code and account number.

Financial Data

  • Total investment in plant and machinery or equipment (as per the latest financial records).
  • Annual turnover of the business to determine the MSME classification (Micro, Small, or Medium).

Nature of Business Activity

  • Classification of the enterprise as either manufacturing or service.
  • Specific details about the products or services offered.

Previous Registrations (If Applicable)

  • Any existing registration details under UAM (Udyog Aadhar Memorandum) or EM-II (Entrepreneur Memorandum).

GST and Tax Details

  • GST Identification Number (GSTIN), if applicable.
  • Business PAN card for tax compliance.

Compliance with Eligibility Criteria

  • Ensure your enterprise meets the investment and turnover limits defined for Micro, Small, or Medium Enterprises under MSME guidelines.

Access to the Udyam Portal

  • Internet access to complete the online registration process on the Udyam Registration Portal.

 

Necessary Documents for Udyam Certificate (MSME)

1. Personal Identification

Aadhar Card (Mandatory):

  • Proprietor’s Aadhar for proprietorship firms.
  • Partner’s Aadhar for partnership firms.
  • Director’s Aadhar for private limited companies or LLPs.

Business Identification

  • PAN Card

Bank Details

  • Bank account number and IFSC code.
  • A canceled cheque (if required for verification).

Business Information

  • Business name and address.
  • Type of organization (e.g., Proprietorship, Partnership, LLP, Private Limited, etc.).

Financial Information

  • Investment in plant and machinery (for manufacturing businesses) or equipment (for service businesses).
  • Annual turnover of the enterprise.

GST and Tax Details (if applicable)

  • GSTIN (if registered under GST).
  • Business’s latest financial statements or ITR for reference.

Existing MSME Registrations (if applicable)

  • Udyog Aadhaar Memorandum (UAM) number or EM-II details (if already registered).

Nature of Business

  • Details about the products manufactured or services provided.
  • National Industry Classification (NIC) Code for the business activity.

Documents necessary for filing SPICe+ form (INC-32) for the registration of a private limited company are outlined as follows:

A. For Indian Nationals serving as directors and subscribers:
  • Affidavit on stamp paper: a declaration by all subscribers affirming their intention to become shareholders of the company
  • Office address proof like the Rental Agreement or Ownership Deed
  • Electricity bill, water bill and other utility bills of the last two months
  • Copy of approval if required
  • Trademark registration details
  • NOC from property owner
  • Proof of identity and address
B. Required Documents For Foreign Nationals serving as directors/Shareholders
  • Passport: Proof of identity
  • Address proof: Accepted documents include a driving license, residence card, bank statement, or government-issued identification with a valid address.

Types of Udyam Certificates (MSME)

The Udyam Certificate is issued based on the classification of enterprises under the Micro, Small, and Medium Enterprises (MSME) category. These classifications are determined by the investment in plant and machinery or equipment and the enterprise’s annual turnover. The types are as follows:

Micro Enterprise Udyam Certificate

This certificate is for small-scale businesses with limited investment and turnover, such as local manufacturers, artisans, or small service providers.

Small Enterprise Udyam Certificate

This category covers businesses that are growing but still fall under small-scale operations, including medium-sized manufacturing units and service providers.

Medium Enterprise Udyam Certificate

This certificate is for larger enterprises that operate on a relatively large scale but still qualify as MSMEs under government guidelines.

Characteristics of Udyam Certificate (MSME)

  • Official Recognition: The Udyam Certificate serves as an official document proving that a business is registered as a Micro, Small, or Medium Enterprise under the MSME Act, 2006.
  • Lifetime Validity: The certificate does not require renewal and remains valid for the lifetime of the business unless there are significant changes in business structure or category.
  • Digital and Paperless: The Udyam Certificate is entirely digital and issued online through the Udyam Registration Portal, eliminating the need for paperwork.
  • Eligibility-Based Classification: It categorizes businesses into Micro, Small, or Medium enterprises based on their investment in plant/machinery or equipment and annual turnover.
  • Single Registration: A business owner can use one Udyam Registration for all activities under a single enterprise, simplifying compliance.
  • Mandatory for MSME Benefits: The certificate is a prerequisite for availing of various government schemes, subsidies, and benefits, such as priority lending and tax rebates.

  • Access to Financial and Legal Protections: Enterprises with Udyam Certification enjoy protection from delayed payments, access to credit, and simplified tax compliance processes.
  • GST and PAN Integration: The registration process is integrated with the GST and PAN databases, ensuring a seamless and accurate application.

 

How to Register for Udyam Certificate (MSME)

step
Visit the Udyam Registration Portal
  • Go to the official Udyam Registration Portal
Choose the Registration Type
  • For New Entrepreneurs: Select this option if you are registering for the first time.
  • For Existing Enterprises: If you already have an Udyog Aadhaar or other MSME registration, choose the re-registration option.
Enter Aadhar Details
  • For proprietorship: Enter the Aadhar number of the proprietor.
  • For partnership firms and companies: Enter the Aadhar of the managing partner or director.
PAN Verification
  • Enter your PAN Card details for verification.
  • The system will auto-fetch your GST and ITR details linked to the PAN.
Fill in Business Details
  • Name of the business.
  • Business address and contact details (email and phone number).
  • Nature of business (manufacturing, services, or both).
  • NIC (National Industrial Classification) Code for your business activity.
  • Bank account details, including account number and IFSC code.
Provide Investment and Turnover Details
  • Enter details about investment in plant, machinery, or equipment.
  • Provide your annual turnover (as per your financial records).
Submit GST and Other Information
  • If applicable, enter your GSTIN (mandatory for medium enterprises).
  • Enter any previous registration details, such as Udyog Aadhaar.
Declaration and Submission
  • Confirm the details and submit the application.
  • A confirmation number will be generated, and your Udyam Certificate will be processed.
Receive Udyam Certificate
  • Once your application is verified, you will receive the Udyam Certificate via email. This certificate is valid for the lifetime of your business.

 

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