An Ultimate Guide To MSME Business Registration 

According to the Press Information Bureau (PIB), MSMEs contributed about 29% to India’s Gross Domestic Production (GDP) in the financial year 2022. However, we still need to utilize our potential more. Thus, to bring this potential to the surface, the government of India introduced MSME registration on the Udyam portal to provide various financial benefits. 

In this blog, we will explain how to register your MSME business on the Udyam portal and learn about the financial benefits provided to MSMEs. 

What Defines a Company as MSME? 

When the government introduced MSME in 2006, the classification was based on the funds invested in plant, machinery, or equipment. Later, the government revised the classification by adding annual turnover criteria. Moreover, the distinction between manufacturing MSMEs and service-sector MSMEs was removed in the revised definition. 

Here is a detailed description of the criteria: 

Criteria	Micro	Small	Medium
Investment & Turnover	< Rs.1 crore & < Rs.5 crore	< Rs.10 crore & < Rs.50 crore	< Rs.50 crore & < Rs.250 crore
Turnover	Rs. 5 crore	< Rs. 50 crore	< Rs. 250 crore

MSME Eligibility Criteria 

Whether your company is in the service sector, manufacturing, retail trading, or wholesale trading, irrespective of whether it fulfills the given criteria per the revised definition, you can register your company as an MSME and enjoy the benefits. The following are the entities that are eligible for MSME registration: 

• Startups 
• Private and public limited companies 
• Sole proprietorship
• Self Help Groups (SHGs)
• Partnership firm
• Co-operative societies
• Trusts
• Limited Liability Partnerships (LLPs)

How To Do Udyam/MSME Registration 

The process of MSME registration or Udyam registration is entirely online. You don’t have to go anywhere carrying your documents, the process is entirely digital. The process can be done on the portal:udyamregistration.gov.in

The registration process is divided into two different categories: 

1. For new entrepreneurs who have not registered as MSME yet or have EM-II

2. For companies registered as UAM and for those already registered on UAM through Assisted filing

Step:1 

If you are a new entrepreneur or have EM-II registration, click on the option highlighted in yellow in the image below. 

Step: 2 

2.1 On the next page, you can see fields where you can enter your (entrepreneur’s) Aadhar number and name. 

2.2 Tick mark the checkbox (see screenshot below) 

2.3 Click on the “Validate and Generate OTP button”. Now, you will receive OTP on your Aadhar registered mobile number. 

(Note – If you are not able to press the button, please check whether you have ticked the checkbox or not)

Step 3 In this step, select the type of organization you own. 

3.1 Enter your PAN no. 

3.2 Specify whether you filed income tax returns last year. 

3.3 Mention whether your business has GSTN or not. 

Step:4 

After verifying the PAN details, you will see the Udyam registration form. Fill in the personal information of entrepreneurs and specify shareholder distribution (if any).

Step:5 

Specify investment and turnover details, checkmark the declaration, and click the “Submit and Get Final OTP” button. Once you get the OTP on your mobile number, submit it. 

Once you submit the form, you will receive an OTP via email. If you do not receive a certificate via email, you can check the status of your application from the Udyam Registration Portal. 

Benefits of Udyam Registration to MSME Business 

Having a Udyam certificate for your MSME business is not just a legal requirement, it’s a financial advantage. In the following section, we will learn about various benefits of Udyam/MSME registration that can significantly boost your business’s financial health: 

Collateral-free Loan 

Under the new initiative of the Government of India, MSME businesses with Udyam certificates can take out business loans without needing to mortgage any assets. This initiative is open to new and existing micro, small, and medium enterprises. 

In partnership with SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small & Medium Industries, a trust named “The Credit Guarantee Trust Fund Scheme” was established to ensure the smooth and widespread implementation of this scheme. 

Subsidized Electricity 

MSME businesses with Udyam or MSME registration certificates can charge electricity at a reduced price, which significantly reduces operating costs. To get this benefit, MSME businesses have to submit an application to the electricity supply authority in that area along with a Udyam/MSME registration certificate. 

ISO Certificate Expense Reimbursement 

Once your MSME business is registered on the Udyam portal, you can get a refund for ISO certification expenses. With this facility, the government aims to enhance the quality of products and services to compete in the international market. 

Over To You 

Now that you’re equipped with the knowledge of MSME registration through Udyam, the process is simpler than you might think. We urge you to obtain a Udyam certificate at your earliest convenience to unlock the multitude of benefits offered by the government. Once you’ve harnessed these advantages, your business will undoubtedly thrive and reach new heights. To manage your finances well and keep your business on the trajectory of success, you may need powerful accounting and billing software. Munim accounting software is being offered for free until 31 March 2025.

Frequently Asked Questions on Udyam/MSME Registration

Q. Is there any fee for Udyam registration? 

A. No, Udyam/MSME registration is free. 

Q. How can I transfer my UAM to Udyam?

A. You can transfer your UAM registration to Udyam by below steps: 

Step 1: Visit the official Udyam registration website 

Step 2: Choose the option “For those already having registration as UAM.”

Step 3: On the next page, you will be asked to provide your Udyog Aadhar Number

Step 4: Verify the process by providing the OTP received either on your mobile number or email

Q. Can I register my company on Udyam without GST? 

A. Yes, you can register your company on Udyam if your business is exempted from GST. However, annual turnover should not exceed ₹40 Lakhs.