Setting up and running a small business in India is now a lucrative endeavour. As the economy expands exponentially, so does the demand for novel products and services. This is why we can see a sharp rise in the MSME sector over the past few years. Today, the government is encouraging more MSME registration under its Udyam registration and other similar initiatives.
All growing small and medium enterprises must consider registering their businesses under the Ministry of MSME. It is a crucial step to ensure the organisation operates with ease and adequate legal authority.
What is this registration?
The MSME registration, better known as the Udyam registration process, is the Indian government’s most recognised channel for registering small and medium-sized businesses. It is a fully free and digitised procedure which is undertaken through an official website.
All registrations are done only through the official MSME portal (https://udyamregistration.gov.in/). Interested users can select the Udyam registration option after logging in to the portal and following the ensuing steps. They can even initiate the process directly with their Aadhar number, without having to log in to the portal first.
To avail the important MSME registration benefits, the business owners will need to furnish accurate organisational information.
This information includes Adhaar card details, official business address, total investment and turnover numbers. Once all these are uploaded online, the portal will scrutinise the documents. After this, the registering business will receive the Udyam Registration Number (URN). This unique number will identify the business as an officially registered organisation, operating under the Indian government’s mandate.
What are the major MSME registration benefits for an upcoming business?
Whether it’s a micro, small or medium enterprise, the goal is to execute business operations with ease while ensuring a steady economic growth curve. In India, having a government-registered business comes with a myriad of perks and operational benefits.
The following are some of the major benefits of MSME registration for a growing business.
- Better credit profile and fund access: Small enterprises with the registered URN enjoy preferential benefits when it comes to raising funds for business. As they are legally transparent, registered MSMEs enjoy advantageous interest rates on loans, better credit limits, and even access loans without any collateral. Although such benefits depend on eligibility and lender policies.
The businesses are eligible for specialised government schemes, like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
- Financial protection: Oftentimes, small-scale businesses suffer losses from delayed payment by the buyers and other liable entities. But the registered MSMEs can hedge these risks, as they fall under the jurisdiction of the MSME Act, 2006.
Under this act, if the buyers don’t pay their dues to the enterprise within a fixed period (45 days), then the enterprise can claim compound interest for the delay. They can even lodge complaints and escalate the matter if the delay persists.
- Enhanced goodwill and credibility: Having an official Udyam Registration Certificate increases confidence amongst stakeholders and customers. This results in a better overall market goodwill, often helping the business differentiate itself from its competitors.
MSME registration is indeed a stepping stone towards unlocking exponential growth, both operationally and financially.
- Access exclusive perks and government schemes: One major benefit of having a Udyam registration is having access to numerous MSME schemes. These processes are available both at the state and central levels.
As a registered business, we can get support through various skill development programmes that increase operational and output quality. Various technological subsidies can help unlock industry-leading quality standards. We can also participate in established trade fairs, organised by the government, as it can boost market exposure.
- Access to government tenders: Registered MSMEs get first preference when the government opens tenders for business expansion. It’s now a rule that 25% of annual government procurement is reserved for MSMEs.
- Updated Validation: As the older Udyog Adhaar registrations are now deemed invalid, small businesses must re-register on the Udyam portal to avail all registration benefits.
So, you can see that there are numerous MSME registration benefits. This is further highlighted by the fact that the entire procedure is completely free of cost and digitally handled.
How to apply for registration?
As discussed above, Udyam registration is undertaken only through the official portal. It involves a few steps that the user will execute chronologically. They are as follows:
- Portal Log In: First, log in to the official Udyam registration portal and select the desired option.
- Document details: After navigating to the correct menu, we will have to fill in our Adhaar details, business address, bank details and other business information. You don’t need to upload any documents to the portal.
- Declaration and submission: After the above steps, users will give a self-declaration and submit the fact-checked data points.
- Certification: Once the details are verified digitally, the business owner will receive the URN.
The entire procedure is digitally handled, it's paperless, and the user receives their Udyam certificate shortly after completing the required steps.
Conclusion
As we can see, MSMEs are the catalyst for India’s rapid economic rise. So, having a stable and steadily growing small to medium enterprise is not just an economic but even a societal asset. MSME registration is the first step in the right direction towards building such an asset, and the ensuing operational benefits bear testament to this crucial fact.
