Udyam registration (MSME): who needs it, benefits and how to register

Udyam registration is the government's way of recognising a business as a micro, small or medium enterprise (MSME). This guide explains who can register, what you need and what registration does and does not do for you.

What is Udyam registration?

Udyam registration is an online registration on the government's Udyam portal. It replaced the older MSME registrations. When it is complete you receive a Udyam Registration Number and a certificate that records your business as a micro, small or medium enterprise.

Who can register?

Any business that makes goods or provides services can apply, whether it is a proprietorship, partnership firm, LLP, company or another type of entity. The category (micro, small or medium) depends on the investment in plant, machinery or equipment and on the turnover of the business. These limits are set by the government and have been revised before, so check the Udyam portal for the current ones.

Is Udyam registration compulsory?

It is not required to start or run a business. Some businesses register because they want to use schemes, loan programmes or tender preferences that are open to MSMEs, and some buyers ask suppliers for the certificate. Whether it is useful to you depends on what you plan to apply for.

What are the benefits of registering?

Benefits depend on the scheme or institution, and they change, but the ones people usually look at are:

• Eligibility for MSME-focused loan and credit support offered by banks and government schemes
• Preference or relaxations in some government tenders
• Support schemes of central and state governments for registered MSMEs
• Rules on timely payment by buyers, which apply to registered micro and small suppliers

Registering does not guarantee a loan or a subsidy. Each scheme has its own conditions.

What documents and details do I need?

• The Aadhaar number of the proprietor, a partner or the authorised signatory
• PAN of the business and, where applicable, its GSTIN
• Business name, address and type of organisation
• Date the business started, activity (manufacturing or services), and the number of people employed
• Bank account details
• Investment and turnover figures, which the portal can link to your PAN and GST records

How does the registration process work?

1. Open the official Udyam portal and start a new registration.
2. Verify the Aadhaar of the proprietor or authorised signatory with an OTP.
3. Enter the PAN details and the business information.
4. Review, submit and note down the Udyam Registration Number.
5. Download the certificate once it is generated.

The government portal does not charge a fee for registration. Be careful with websites that look official but ask for payment, and check that you are on the real portal.

What should I do after registering?

Keep your details up to date on the portal when your business changes, for example its address, activity or bank account. If your investment or turnover grows, your category can change.

Do I need help with Udyam registration?

Many owners register on their own. If you are not sure about the category, your activity codes or your records, our Experts can help. See Udyam registration. If you are still choosing a structure for the business, read about which type of business to register.

This article is general information, not individual professional advice. Limits, schemes and procedures change, so check the official Udyam portal or ask our Experts before you act.