All About MSME Udyam Registration Procedure & Classification

MSME stands for Micro, Small, and Medium Enterprises, and Udyam registration is the process of registering such enterprises with the Ministry of Micro, Small, and Medium Enterprises. The Udyam registration process is online and can be done through the official Udyam Registration portal. 

Also, Read- Update Udyam Certificate

Here’s a step-by-step guide to the Udyam registration procedure:

Step 1: Visit the Udyam Registration portal.

Step 2: Enter your Aadhaar number and name as mentioned on the Aadhaar card. Click on “Validate & Generate OTP.”

Step 3: Enter the OTP sent to your mobile number and click on “Validate.”

Step 4: Fill in the Udyam registration form with all the necessary details, including the name of the enterprise, its address, PAN number, bank account details, and other relevant information.

Step 5: Select the appropriate MSME classification based on the investment and turnover of the enterprise.

MSME Classification:

MSMEs are classified into two categories:

  1. Manufacturing Enterprises: These are the enterprises involved in the production or manufacturing of goods.
  1. Service Enterprises: These are the enterprises that are engaged in providing or rendering services.

Further, MSMEs are categorized based on their investment and annual turnover. Here’s a quick overview of the MSME classification:

  1. Micro Enterprises: Investment up to Rs. 1 crore and turnover up to Rs. 5 crores.
  1. Small Enterprises: Investment up to Rs. 10 crores and turnover up to Rs. 50 crores.
  1. Medium Enterprises: Investment up to Rs. 50 crores and turnover up to Rs. 250 crores.

Step 6: Upload the necessary documents, including PAN card, GSTIN, and other relevant certificates.

Step 7: Click on “Submit” to complete the Udyam registration process.

Once the Udyam registration process is complete, you will receive an Udyam registration certificate, which will be sent to your registered email address. This certificate will be your proof of registration as an MSME and can be used for availing various benefits and schemes offered by the government to MSMEs.

MSME UDYAM REGISTRATION OF EXISTING ENTERPRISES

If you are an existing enterprise and wish to register under the MSME Udyam Registration scheme, here’s what you need to know:

  • All enterprises registered under the Udyog Aadhaar Memorandum (UAM) before 30th June 2020 are required to re-register under the new Udyam registration portal.
  • The registration process is online and can be done through the official Udyam Registration portal.
  • To re-register, you need to have your UAM registration number and the registered mobile number.
  • Visit the Udyam Registration portal and enter your UAM registration number and the registered mobile number.
  • An OTP will be sent to your registered mobile number. Enter the OTP and proceed with the registration process.
  • Fill in the Udyam registration form with all the necessary details, including the name of the enterprise, its address, PAN number, bank account details, and other relevant information.
  • Select the appropriate MSME classification based on the investment and turnover of the enterprise.
  • Upload the necessary documents, including PAN card, GSTIN, and other relevant certificates.
  • Click on “Submit” to complete the Udyam registration process.
  • Once the Udyam registration process is complete, you will receive an Udyam registration certificate, which will be sent to your registered email address. This certificate will be your proof of registration as an MSME and can be used for availing various benefits and schemes offered by the government to MSMEs.

PENALTY ON MISREPRESENTATION

Misrepresentation in Udyam registration can attract penalties under the MSMED Act, 2006. If an enterprise is found to have provided false information or misrepresentation in the Udyam registration process, the following penalties may be imposed:

  1. If an enterprise intentionally provides incorrect information, it can be fined up to Rs. 1 lakh.
  1. If an enterprise knowingly makes a false statement or misrepresentation, it can be fined up to Rs. 10 lakhs.
  1. If an enterprise provides false information for the second or subsequent time, the punishment can be imprisonment for a term of up to 6 months, along with a fine.

It is, therefore, important for enterprises to provide accurate and correct information during the Udyam registration process to avoid penalties and legal action. Enterprises must also update their Udyam registration details in case of any changes in their business structure or turnover.

UPDATION OF INFORMATION AND TRANSITION PERIOD IN CLASSIFICATION

The Udyam Registration portal allows enterprises to update their information in case of any changes. Enterprises can update their Udyam registration details, including their business name, address, bank account details, and other relevant information, by logging into their Udyam account on the portal.

Further, the classification of an enterprise under the MSME sector is based on its investment and annual turnover. If an enterprise’s investment or turnover increases beyond the limit of its existing classification, it will need to transition to the next higher category. For example, if a micro enterprise’s investment or turnover crosses the limit of Rs. 1 crore or Rs. 5 crores, respectively, it will need to transition to the small enterprise category.

The transition period for such a change is as follows:

  1. The enterprise can continue to enjoy the benefits of its existing classification until the end of the financial year.
  1. The enterprise must upgrade its registration on or before 31st March of the subsequent year.
  1. The enterprise must comply with the new investment and turnover limits of the upgraded category from the beginning of the next financial year.

It is important for enterprises to ensure that their Udyam registration details are updated and accurate to avoid any penalties or legal action.

CONCLUSION

The MSME Udyam Registration scheme has been introduced by the Indian Government to provide various benefits and incentives to micro, small, and medium-sized enterprises. The registration process is online, and existing enterprises can re-register under the new Udyam registration portal. Enterprises must provide accurate information and update their registration details in case of any changes to avoid penalties and legal action.

The MSME classification is based on the investment and annual turnover of the enterprise, and enterprises must transition to the next higher category if their investment or turnover exceeds the limit of their existing classification. The transition period allows enterprises to continue to enjoy the benefits of their existing category until the end of the financial year, after which they must upgrade their registration and comply with the new investment and turnover limits.

Overall, the MSME Udyam Registration scheme provides an excellent opportunity for micro, small, and medium-sized enterprises to benefit from various government schemes and incentives. By registering and updating their details accurately, enterprises can maximize their benefits and contribute to the growth of the Indian economy.

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