Introduction:
The Udyam registration is the government's plan that makes the registration of Indian MSMEs easier. The Udyam registration plays a crucial role for startups and other new businesses and offers various benefits that the government offers them in the form of schemes, subsidies, easy loans, etc. However, many come into trouble due to unawareness or failure to follow the registration process.
Benefits for Startups and New Businesses:
Here are the reasons why startups and small businesses will benefit from Udyam Registration.
Many benefits accrue to the startups and small units from Udyam Registration. Some of them are as under:
It provides easy availability of loans to the registered businesses on hard as well as soft interest rates thus providing easy access to working capital and increasing the level of operation.
Government Subsidies and Incentives: The business entities registered at Udyam become eligible for several subsidies- patent registration, ISO certification, and electricity rates amongst others.
Ease in Licenses: Udyam Registration can simplify the whole exercise of licenses or permits and approvals of several governmental bodies.
- Protection Against Delayed Payments: Under the Udyam registration, MSMEs are legally entitled to recover delayed payments by the buyer from them for the protection of cash flow.
- Participation in tenders: Many government tenders are only restricted to Udyam-registered enterprises and give a giant opportunity for business growth.
These will provide excellent relief to the startups and new entrepreneurs to carry themselves well, as they will flourish strong on the shoulders of opportunities in front of them to face the stiff market.
Eligibility Criteria for Udyam Registration:
Eligibility Conditions to apply for Micro, Small Enterprises as well as Medium Enterprises, as follows:
- Investment for Micro Enterprises: up to ₹1 crore and turnover up to ₹5 crore.
- Investment for Small Enterprises: up to ₹10 crores and turnover up to ₹50 crores.
- Investment for Medium Enterprises: Organizations with a maximum investment of ₹50 crores and a total turnover of up to ₹250 crores.
These limits would cover total investment as well as turnover for all the manufacturing and service-based companies. All the Startups that fall within the limits would be liable for Udyam Registration, to which they could apply to avail themselves of the facilities associated with registration.
Common Barriers to Obtaining Udyam Registration:
Though Udyam Registration is a less complicated procedure still, many problems persist in the registration process of most startups and small businesses. Stated below are some common problems:
- Lack of awareness: Entrepreneurs are not aware of the process eligibility criteria or the pros of Udyam Registration.
- Documentation issues: Many candidates get rejected, or the whole procedure gets delayed because of many documentation errors such as Aadhar detail mismatch or PAN card details not being accurately furnished.
- Technical Mistakes: Any sort of technical malfunction or server error in the online system related to the registration portal is going to annoy applicants.
- Classification Issues: The proper classification of the business might confuse the new business owner either as a micro, small, or medium because it depends on investment and turnover.
- Up-gradation Issues: Since there is a possibility that one's business information might have to be updated post-registration, unclear processes on the portal can cause trouble for most start-ups.
Removal of these troubles shall smoothen the process of registering new businesses.
Compliance Tips to Register Udyam Smoother:
To avoid a hitch in the process of registration, startups, and other entrepreneurs must observe the compliance tips for smooth Udyam registration:
- Proper Documentation: As a pre-requirement, get your UID Card, PAN Card, and other business-related documents rechecked to ensure that there is no hitch during the registration process.
- Know Your Class: Use the classification criteria based on investment and turnover as a micro, small, or medium enterprise. Then there will be no error at the time of registration.
- Only Official Website: One will use only the official website of Udyam Registration and avoid fake third-party sites that charge some money.
- Update Contact Details: He/She shall be using the active personal email address as well as the mobile number for time-bound notifications in case of a status update regarding the process of registration.
- Avail Professional Help if Required: At any point in the registration procedure, there exists a case wherein some problem or issue arises, and then a professional adviser or chartered accountant may be solicited to seek their advice.
By following such steps, registration can be made relatively easy by start-ups for start-ups so that mistakes generally are not committed.
Udyam Registration Validity and Renewal:
Once the business is registered under the Udyam Udyam registration it becomes lifetime valid for any enterprise. This means annual renewal compliance is not an issue, and this lightens its compliance to businessmen. However, for investments or turnover changes that might shift its class position, the business has to update its information on the portal or incur a loss in benefits or exposure to law hassles. Hence, start-ups and small-sized enterprises need to update their details of registration time and again to be in tandem with all the mandates of the Udyam portal.
Conclusion:
Udyam Registration is a due process for any newcomer business ventures in India which provides them with a wide array of options that can create growth and sustainability. First, it sounds very complicated and a time-consuming process; however, adequate knowledge of all the requirements followed by it makes it feasible. Udyam Registration proves to be rather an easier process for scaling business through government initiatives with the advantage of jumping onto such benefits. Having all the necessary preparations under proper advice would not keep one much hassled during the process of registration. This will ensure the long-term success of the business, thereby bringing it to the proper shape.
