Udyam Registration is a process through which small and medium-sized enterprises (SMEs) in India can register themselves and obtain a unique identification number from the Ministry of Micro, Small and Medium Enterprises (MSME). This registration is mandatory for businesses seeking to avail of various government schemes and benefits, such as subsidies, loans, and other financial assistance. Udyam Registration replaced the earlier registration process known as MSME registration, and it aims to simplify the registration process for SMEs and promote ease of doing business in India.
See also: udyam registration for startup companies
Benefits of Udyam registration
There are several benefits of obtaining Udyam Registration in India, including:
Access to Government Schemes and Subsidies: Udyam Registration enables small and medium-sized enterprises (SMEs) to access various government schemes and subsidies offered by the Ministry of Micro, Small and Medium Enterprises (MSME), such as loans, credit facilities, and other financial assistance.
Priority Sector Lending: Banks and financial institutions in India are required to lend a certain percentage of their funds to priority sectors, including MSMEs. Udyam Registration can help SMEs qualify for priority sector lending and obtain loans at lower interest rates.
Protection against Delayed Payments: Udyam Registration provides SMEs with protection against delayed payments for goods and services delivered to large companies. Under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, large companies are required to make payments to SMEs within 45 days of the delivery of goods or services, failing which they are liable to pay interest at a higher rate.
Improved Credibility and Business Opportunities: Udyam Registration can enhance the credibility and visibility of SMEs, making them more attractive to customers, investors, and other stakeholders. It can also open up new business opportunities and help SMEs expand their reach and customer base.
Government Support: Udyam Registration enables SMEs to receive support and guidance from the government on various aspects of business, such as marketing, technology, and skill development. This can help SMEs improve their competitiveness and overall business performance.
Overall, Udyam Registration offers numerous benefits to SMEs in India, including access to government schemes and subsidies, priority sector lending, protection against delayed payments, improved credibility and business opportunities, and government support.