Micro, Small and Medium Enterprises (MSMEs) play a vital role in the Indian economy by generating employment, encouraging innovation, and contributing to exports. To promote and support MSMEs, the Indian government introduced the Udyam Registration portal, replacing the earlier system of Udyog Aadhaar. This system simplifies the process of registering MSMEs and provides them access to various schemes and benefits.
This article explains the classification of MSMEs under Udyam Registration and provides a step-by-step guide to the registration process.
What is Udyam Registration?
Udyam Registration is an online registration process which is launched by the Ministry of Micro, Small and Medium Enterprises on July 1, 2020. It is a government-recognized certificate that identifies and categorizes MSMEs in India. This registration is mandatory for businesses that wish to avail themselves of MSME benefits such as financial support, subsidies, collateral-free loans, and priority sector lending.
Classification of MSMEs
The classification of MSMEs is based on two main criteria:
- Investment in Plant and Machinery or Equipment
- Annual Turnover
The classification as per the MSME notification dated June 26, 2020, is as follows:
| Type of Enterprise | Investment (in ₹) | Turnover (in ₹) |
| Micro Enterprise | Up to ₹1 crore | Up to ₹5 crore |
| Small Enterprise | Up to ₹10 crore | Up to ₹50 crore |
| Medium Enterprise | Up to ₹50 crore | Up to ₹250 crore |
These limits are applicable for both manufacturing and service enterprises, ensuring a uniform classification system across all sectors…!
Benefits of Udyam Registration
Businesses registered under the Udyam scheme enjoy the following benefits:
- Easy access to government schemes and subsidies
- Lower interest rates on bank loans
- Priority in government procurement
- Protection against delayed payments
- Concession on electricity bills and other utility services
- Eligibility for credit guarantee and collateral-free loans
Who Can Register under MSME?
Any person or entity intending to start or begin a micro, small, or medium enterprise can apply for the Udyam Registration. The types of enterprises eligible include:
- Proprietorships
- Hindu Undivided Families (HUF)
- Partnership Firms
- Limited Liability Partnerships (LLP)
- Private Limited Companies
- Public Limited Companies
- Co-operative Societies
- Any other undertaking
Documents Required for Udyam Registration
The registration process is paperless and based on self-declaration. The following details are required:
- Aadhaar Number of the proprietor or managing partner or director
- PAN and GSTIN (where applicable)
- Business details such as name, type of organization, address, and activity
- Bank account details
Note: No documents or certificates need to be uploaded physically.
Step-by-Step Procedure for Udyam Registration
1. Visit the Official Portal
Go to the Udyam Registration portal: https://udyamregistration.gov.in
2. Choose the Type of Registration
- For new businesses: Select “For New Entrepreneurs who are not Registered yet as MSME.”
- For those with EM-II or UAM registration: Select the relevant option for migration.
3. Enter Aadhaar Details
Provide the Aadhaar number and name as per the records. A one-time password will be sent to the registered mobile number.
4. Enter PAN Details
Fill in the PAN details. The portal will auto-fetch GST and ITR details if available.
5. Fill Business Details
Enter the business name, type, activity (manufacturing or service), location, bank details, number of employees, and investment and turnover details.
6. Submit and Receive Certificate
After final submission, the Udyam Registration Certificate will be generated and sent to your registered email address. This certificate contains a unique Udyam Registration Number (URN)…!
Conclusion
Online Udyam Registration simplifies the process for MSMEs to register and get government benefits in India. By registering through this system, businesses can not only gain official recognition but also unlock a number of financial and support incentives. With the classification criteria clearly defined and the process made user-friendly and fully online, it is advisable for every eligible enterprise to complete their Udyam Registration and become a part of India’s formal economic ecosystem.
