The Union Government after obtaining the recommendations of the Advisory Committee, had approved the modalities and road map for the micro, small and medium enterprises (MSME) in June last year. In order to confirm to the new definition of MSMEs and ease of doing business, the earlier EM-I/ II and Udyog Aadhaar Memorandum (UAM) registration process was replaced by a new registration portal under Udyam Registration in July last year. The move behind introducing the new system was to simplify the procedural format that business owners had to go through to register their business under MSME norms.
The registration process has been made convenient through a one-page easy to fill online form on Udyam registration’s official website — https://udyamregistration.gov.in. The process does not require any documents, one or more business enterprises can be easily registered and the MSME Registration is free of cost. Upon registration, an enterprise will be assigned a permanent identity number to be known as ‘Udyam Registration Number.’ An e-certificate namely Udyam Registration Certificate will be issued on completion of registration process.
By registering in the industry base, businesses can enjoy several benefits/advantages.Here are some of them:
1. All banks and financial institutions give priority to MSMEs, which include providing priority sector lending at lower interest rates. The Government of India had also introduced Credit Guarantee Fund Scheme (CGS) for MSME’s to make available collateral-free credit to the sector.
2. Firms/enterprises registered under the MSME Act are eligible to avail a benefit of 1 percent on the overdraft as part of the Credit Guarantee Trust Fund Scheme. However, this can vary from bank to bank.
3. Tax benefits: Depending on the size of your enterprise, businesses may get benefits like Excise Exemption Scheme or you may get a direct tax exemption in the initial years among others.
4. State Governments benefits: Enterprises can also avail a host of benefits from their respective State Governments, such as subsidies on electricity, sales tax and entry to the businesses which are associated with the industry base.
5. Other than benefits doled out by state government benefits, firms can profit from the Union Government as well. They include benefits from the various schemes such as Credit Guarantee Scheme, Women Entrepreneur, Quality Management Standards and Quality Technology Tools, Atmanirbhar Bharat, Zero Effect Zero Defect, Hip Incubation,for the MSME sector.