Udyam registration is the new registration process introduced by the government of India to register micro, small, and medium enterprises (MSMEs) online. Earlier, MSME registration was done through the Udyog Aadhaar Memorandum (UAM) portal. Here are the key differences between Udyam registration and MSME registration
Udyam registration is a new and simplified registration process for Micro, Small, and Medium Enterprises (MSMEs) in India, launched by the Ministry of Micro, Small, and Medium Enterprises on July 1, 2020. It is an online process for registering MSMEs and replacing the earlier registration process of Udyog Aadhaar.
The objective of Udyam registration is to provide a single-window system for registration of MSMEs, making it easier and faster for them to register and avail of various benefits and schemes provided by the government. It also aims to create a comprehensive database of all MSMEs in the country, which will help in policy-making and implementation of schemes and programs for MSMEs.
Under the old UAM registration process, the maximum limit for investment in plant and machinery for micro, small, and medium enterprises was Rs. 25 lakhs, Rs. 5 crores, and Rs. 10 crores, respectively. However, under the new Udyam registration process, the investment limit has been increased to Rs. 1 crore for micro-enterprises, Rs. 10 crores for small enterprises, and Rs. 50 crores for medium enterprises.
Based on PAN
Udyam registration is based on the Permanent Account Number (PAN) of the MSME, whereas MSME registration was based on the Aadhaar number.Yes, Udyam registration is based on PAN (Permanent Account Number) issued by the Income Tax Department of India. During the Udyam registration process, the enterprise is required to provide its PAN number as well as other details such as Aadhaar number, business name, address, and type of organization.
The PAN number is used to verify the authenticity of the enterprise and to track its financial transactions. Once the Udyam registration is completed, a unique Udyam Registration Number (URN) is issued to the enterprise, which is linked to its PAN number. The URN is a 12-digit number that serves as a unique identifier for the enterprise and is required for availing of various benefits and schemes provided by the government for MSMEs.
Udyam registration is an online process, whereas MSME registration was done either online or offline through the Udyog Aadhaar Memorandum (UAM) portal or the district industries center (DIC).
The Udyam registration certificate is valid for a period of 10 years from the date of issue, whereas the MSME registration certificate was valid for an indefinite period.The validity period for Udyam registration is a lifetime. Once an enterprise has registered under Udyam, it will hold the registration status until it crosses the turnover limit of Rs. 250 crores or if it violates any of the rules or regulations of the MSME ministry. Unlike the earlier MSME registration process, where the registration had to be renewed every 5 years, Udyam registration is a one-time process, and there is no need for renewal.
The documentation process for Udyam registration is simplified and requires minimal documentation compared to MSME registration.Udyam registration and MSME registration are both registration processes for micro, small and medium enterprises in India. However, there are some key differences between the two registration processes.
Under the old MSME registration process, the maximum investment limit for a micro-enterprise was Rs. 25 lakhs, for a small enterprise was Rs. 5 crores, and for a medium enterprise was Rs. 10 crores. However, under the new Udyam registration process, the investment limit has been revised to Rs. 1 crore for micro-enterprises, Rs. 10 crores for small enterprises, and Rs. 50 crores for medium enterprises.
Basis of Registration
MSME registration was based on the Aadhaar number of the proprietor, while Udyam registration is based on the PAN card of the enterprise.
- Micro-enterprises: Micro-enterprises are those enterprises where the investment in plant and machinery or equipment does not exceed Rs. 1 crore, and their annual turnover does not exceed Rs. 5 crores.
- Small enterprises: Small enterprises are those enterprises where the investment in plant and machinery or equipment does not exceed Rs. 10 crores, and their annual turnover does not exceed Rs. 50 crores.
- Medium enterprises: Medium enterprises are those enterprises where the investment in plant and machinery or equipment does not exceed Rs. 50 crores, and their annual turnover does not exceed Rs. 250 crores.
The Udyam registration certificate is valid for a period of 10 years, while the MSME registration certificate was valid for an indefinite period.
Udyam registration requires minimal documentation and can be done online, while MSME registration required more documentation and could be done both online and offline.
An enterprise that fulfills the above criteria can register under Udyam and avail of various benefits and schemes provided by the government for MSMEs. The Udyam registration process is entirely online, and the enterprise can complete it within a few minutes by providing the necessary details and uploading the required documents. Once the registration is complete, the enterprise will receive a unique Udyam Registration Number (URN), which will serve as proof of its registration.
Registration process for new enterprises
For new enterprises, the registration process under Udyam is straightforward and can be completed entirely online. The enterprise must provide details such as the name, type of enterprise, PAN, and Aadhaar number of the proprietor or authorized signatory, and other related information. Once the details are verified, the enterprise will receive a unique identification number (UIN) and an e-certificate.
Registration process for existing enterprises
For enterprises registered under the earlier Udyog Aadhaar process, the re-registration process under Udyam is mandatory. The registration process is the same as that of new enterprises, and the Udyog Aadhaar number will be replaced with the Udyam registration number.
All enterprises that fall under the definition of MSMEs can register under Udyam. However, enterprises engaged in certain prohibited activities such as gambling, betting, or similar activities are not eligible for registration.
Role of District Industries Centre
District Industries Centre (DIC) plays a vital role in the registration process. DIC is responsible for verifying the details provided by the enterprise and issuing the Udyam registration number. DICs are also responsible for providing assistance and support to MSMEs in their respective districts.
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Udyam registration is the new and simplified registration process introduced by the government of India for MSMEs. It is based on the PAN of the MSME and has higher investment limits compared to the old MSME registration process. Udyam registration is an online process and has a validity period of 10 years. MSMEs can take advantage of the benefits provided by Udyam registration, such as access to credit, government schemes and subsidies, preference in government procurement, market development assistance, protection against delayed payments, and concession in electricity bills.