After china india has the world largest msme registration . Msme registration online play an important role in the country economic and social development by encouraging innovation as well as entrepreneurship and job creation as well as export and inclusive growth.
According to the national statistical office the micro, small and medium enterprise sector contributed 30.3 per cent of the country total gross domestic product in year 2018 to year 2019. The government of india has always placed a strong emphasis on the sector growth and development and a recent move was the introduction of udyam registration for micro, small and medium enterprise which will take effect on 1st of july, 2020, and will simplify the process of micro, small and medium enterprise registration from udyog aadhaar memorandum and entrepreneur memorandum part two old process.
This page will explain the procedure and requirement for udyam registration which are applicable to micro, small and medium enterprise as well as the amended definition of micro, small and medium enterprise classification.
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With effect from 1st of july, 2020 all enterprise will be classified as micro, small and medium enterprise.
The micro, small and medium enterprise development act which was notified in 2006 define the governing law for an enterprise to be classified as micro, small and medium enterprise. Through numerous plan as well as privilege and other incentive from the government of india this legislation aim to encourage the development of these firm as well as increase their competitive.
Finance minister nirmala sitaraman announced change to the concept of micro, small and medium enterprise while delivering the economic package as part of the atma nirbhar bharat abhiyaan. These change were formally announced in june 2020, and they will go into effect on 1st of july, 2020. Previously micro, small and medium enterprise were defined solely by the amount of money invested however the new criteria now incorporate the company turnover as well. In addition the new definition would include both manufacturing and service enterprise in the same statistic.
The advantage of registering as an udyam.
Although the governing statute does not make micro, small and medium enterprise registration necessary it is frequently required for the purpose of complying with and disclosing the requirement of other regulating act such as the companies act 2013. However an enterprise that is established under the above mentioned act would be able to take advantage of the benefit and privilege that the government has announced at the time.
By registering with the udyam registration portal micro, small and medium enterprise can benefit from the stimulus package collateral free automatic loan electronic market linkages across the board to provide marketing opportunity protection against late payment on material supplied and financial assistance at lower interest rate as well as tax rebate and preferential treatment when issuing go.
The registration process for udyam.
An enterprise must register by following the step below.
Anyone who want to start a micro, small and medium business can apply for udyam registration online using the udyam registration portal which is based on self declaration and does not require the upload of any document and paper certification as well as proof.
Unlike the udyog aadhaar memorandum and entrepreneur memorandum part two which required renewal the new udyam registration is a one time registration for an micro, small and medium enterprise.
In the udyam registration portal there is a simplified registration form. When a firm obtains a goods service tax identification number the name and address as well as bank information of the company are obtained from the good service tax portal.
An aadhaar number will be required for udyam registration. The proprietor aadhaar number in the case of a proprietorship firm the controlling partner aadhaar number in the case of a partnership firm and a karta aadhaar number in the case of a hindu undivided family aadhaar number in the case of a hindu undivided family aadhaar number in the case of a hindu undivided family. If the organization is a company and a limited liability partnership as well as a co operative society and a society and a trust as well as the goods service tax identification number and permanent account number as well as the aadhaar number must be submitted by the organization and its authorized signatory.
An enterprise will be granted a permanent identifying number known as the udyam registration number after registration.
On completion of the registration process an electronic certificate titled udyam registration certificate will be issued.
If an entity is properly registered as an udyam with a permanent account number any information gap from prior year when it did not have a permanent account number must be filled out on a self declaration basis. No business may file more than one udyam registration although any number of activity including manufacturing as well as service and both may be listed as well as added to a single udyam registration. Control room operating in various institution and office of the ministry of micro, small and medium enterprise including the development institute and district industry centre would serve as single window system for facilitating the registration process.
Existing enterprise under entrepreneur memorandum part two and udyog aadhaar memorandum can re register under udyam.
As of 1st of july, 2020 every current entrepreneur memorandum part two and udyog aadhaar memorandum registered business must re register on the udyam registration portal. According to the 26th of june, 2020 announcement all enterprise that were registered before 30th of june, 2020 would be reclassified. Existing enterprise that were established before 30th of june, 2020 will only be valid until 31st of march, 2021. Any firm that is registered with another ministry of micro, small and medium enterprise agency must also register with udyam registration.
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After receiving the udyam registration number the business must update its information online in the udyam registration site including the content of the preceding financial year income tax return and goods service tax return as well as any other information that may be necessary on a self declaration basis. If the essential information is not updated within the timeframe indicated on the udyam registration portal the enterprise status will be suspended. The categorization of the business will be updated based on information provided or received from government source such as income tax return and goods service tax return.