MSME Udyam Registration – Calculation & Benefits

UDYAM Registration of enterprises

udyam registration is a process introduced by the Government of India to register micro, small, and medium-sized enterprises (MSMEs). It replaced the earlier process of registration known as Udyog Aadhaar Memorandum (UAM).

The UDYAM registration process is completely online, and businesses can apply for registration on the official portal of the Ministry of MSMEs. The registration process requires the business to provide information such as their name, address, type of organization, PAN number, and Aadhaar number of the owner or promoter.

The UDYAM registration also requires the business to self-certify their eligibility for MSME status based on their investment in plant and machinery or equipment and their annual turnover. The definition of MSMEs based on these criteria was revised in 2020, and the registration process now allows businesses to select the appropriate category of MSME based on their eligibility.

Once the UDYAM registration is complete, the business is provided with a unique UDYAM Registration Number (URN) and a UDYAM certificate, which serves as proof of their registration. The registration is free of cost and is valid for a lifetime, provided the business continues to operate within the prescribed investment and turnover limits for their category of MSME.

The UDYAM registration provides several benefits to MSMEs, such as access to government schemes, credit facilities, subsidies, and incentives. It also makes it easier for MSMEs to participate in government tenders and access credit from banks and other financial institutions.

An understanding on MSME:

MSME stands for Micro, Small and Medium Enterprises, which are small businesses that are considered the backbone of many economies around the world. The definition of MSMEs may vary across countries, but generally, they are defined based on their annual turnover, number of employees, and investment in fixed assets.

In India, for instance, a business with an annual turnover of up to INR 250 million (approx. USD 3.4 million) and investment in plant and machinery or equipment up to INR 50 million (approx. USD 680,000) is considered a micro-enterprise. A business with a turnover of up to INR 1 billion (approx. USD 13.7 million) and investment in plant and machinery or equipment up to INR 250 million is considered a small enterprise. A business with a turnover of up to INR 5 billion (approx. USD 68.5 million) and investment in plant and machinery or equipment up to INR 500 million (approx. USD 6.85 million) is considered a medium enterprise.

MSMEs play a crucial role in economic development, as they contribute significantly to employment generation, GDP growth, and exports. They also have a higher propensity to innovate and adapt to changing market conditions. However, MSMEs face several challenges, such as limited access to finance, technology, and skilled labor, regulatory compliance, and competition from larger enterprises. Governments around the world have implemented various policies and programs to support MSMEs, such as providing financial assistance, tax incentives, and business development services.

Documents required for udyam registration

To register for the Udyam Registration under the Ministry of Micro, Small and Medium Enterprises (MSMEs), you will need to have the following documents:

  • Aadhaar Card: The Aadhaar card of the proprietor or the authorized signatory of the enterprise is mandatory for registration. It will be used for verification purposes.


  • PAN Card: A Permanent Account Number (PAN) card is required for the registration of the enterprise.


  • Bank Account Details: You will need to provide the bank account details of the enterprise to complete the registration process.


  • Business Address Proof: A proof of the business address is required for registration. It could be in the form of a lease deed, property tax receipt, or any other government document.


  • Business Name and Type: The name of the business and its type are mandatory fields in the registration form.


  • NIC Code: The National Industrial Classification (NIC) code for the activity that is carried out by the enterprise is required. You can find it on the website of the Ministry of MSMEs.


  • Additional Documents: Depending on the type of enterprise, additional documents such as partnership deed, memorandum of association, articles of association, or certificate of incorporation may be required.

It is important to note that the above documents may vary depending on the type of enterprise and the registration process followed. It is advisable to check the official website of the Ministry of MSMEs for the latest updates and requirements.

Benefits of MSME Udyam Registration

The Udyam Registration of MSMEs in India provides several benefits to businesses, including:

  1. Eligibility for Government Schemes and Subsidies: MSMEs registered under Udyam are eligible for various government schemes and subsidies, such as credit guarantee schemes, technology up-gradation programs, and export promotion schemes.
  2. Faster Access to Credit: Udyam registration helps MSMEs to get faster access to credit from banks and financial institutions. The registration provides the financial institutions with a reliable source of information on the business, which makes it easier for them to evaluate and approve loan applications.
  3. Lower Interest Rates: MSMEs registered under Udyam are eligible for lower interest rates on loans and other financial products. This is because the registration serves as a proof of the business’s credibility and reliability, which reduces the risk for lenders.
  4. Protection from Delayed Payments: Udyam registration enables MSMEs to file complaints against buyers who delay payments beyond the stipulated period. The government has set up a mechanism to facilitate the settlement of disputes related to delayed payments.
  5. Enhanced Market Reach: MSMEs registered under Udyam can participate in government tenders, which can help them expand their market reach and win more business.
  6. International Recognition: Udyam registration is recognized by various international organizations, such as the International Organization for Standardization (ISO). This recognition can help MSMEs to expand their business globally.

Overall, Udyam registration provides MSMEs with several benefits that can help them grow and expand their business.

Know More about How to update udyam certificate.


In conclusion, MSMEs play a crucial role in the economic development of many countries, and Udyam registration is an important initiative by the Government of India to support and promote the growth of these businesses. The registration provides several benefits to MSMEs, such as eligibility for government schemes and subsidies, faster access to credit, lower interest rates, protection from delayed payments, enhanced market reach, and international recognition. The Udyam registration process is simple, online, and free of cost, and MSMEs should take advantage of this initiative to avail of the benefits and grow their business.

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