TOP BENEFITS OF GETTING YOUR BUSINESS REGISTERED UNDER UDYAM

Top Benefits of Getting Your Business Registered Under Udyam

Top Benefits of Getting Your Business Registered Under Udyam

Blog Article

Starting and running a business is a big decision that requires effort, planning, and the right support. In India, the government has introduced many schemes and programs to support small and medium businesses. One of the most important steps for a business is to register under the Udyam Registration system. This registration is specifically made for Micro, Small, and Medium Enterprises (MSMEs) to help them grow, get government support, and access various business benefits.

In this complete guide, we will explain the top benefits of Udyam Registration in very simple words. If you are a business owner or thinking of starting a business, this guide will help you understand why Udyam Registration is valuable.

What is Udyam Registration?


Udyam Registration is a simple online process started by the Ministry of Micro, Small, and Medium Enterprises (MSME) of the Government of India. It gives official recognition to businesses that fall under the Micro, Small, and Medium categories.

Before Udyam, businesses were registered under the Udyog Aadhaar Memorandum (UAM) system. The new Udyam Registration replaced this old system from 1st July 2020. It is now much easier, quicker, and fully online. After registering, a business gets a Udyam Registration Number and a digital certificate.

Who Can Apply for Udyam Registration?


Any business that falls under these categories can register:

  • Micro Enterprises: Investment up to Rs. 2.5 crore and turnover up to Rs 10 crore.

  • Small Enterprises: Investment up to Rs. 25 crore and turnover up to Rs. 100 crore.

  • Medium Enterprises: Investment up to Rs 125 crore and turnover up to Rs 500 crore.


This includes businesses like:

  • Manufacturing units


  • Service providers


  • Sole proprietorships


  • Partnership firms


  • Private limited companies


  • Limited liability partnerships (LLPs)


  • Hindu Undivided Families (HUFs)


  • Trusts


  • Co-operative societies



Now, let’s understand the top benefits of getting your business registered under Udyam.

Top Benefits of Udyam Registration


1. Legal Recognition for Your Business


When you register your business under Udyam, it gets legal recognition from the government. This helps to:

  • Prove that your business exists and falls under the MSME category.


  • Make your business identity stronger and more trustworthy in the market.


  • Build confidence among customers, clients, suppliers, and financial institutions.



Legal recognition is essential for participating in government programs, applying for loans, and protecting your business rights.

2. Easy Access to Government Schemes


The government of India has designed many schemes specifically for MSMEs. After Udyam Registration, your business becomes eligible to apply for these schemes. Some popular schemes are:

  • Prime Minister’s Employment Generation Programme (PMEGP)


  • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)


  • Credit Linked Capital Subsidy Scheme (CLCSS)


  • Technology Upgradation and Support Programs



These schemes offer financial assistance, subsidies, and support for business development and growth.

3. Collateral-Free Loans


One of the biggest challenges for small businesses is getting loans without security. After registering under Udyam, your business can apply for collateral-free loans under schemes like:

  • CGTMSE Scheme


  • Mudra Loan Scheme



Banks and financial institutions treat MSMEs as a priority and often provide loans at easier terms and lower interest rates. This helps businesses manage cash flow, buy equipment, or expand without financial stress.

4. Lower Interest Rates on Loans


Banks and financial institutions usually offer lower interest rates on loans to Udyam-registered businesses. This reduces the cost of borrowing and helps MSMEs invest more in growth and development.

Since MSMEs are recognized as a priority sector by the Reserve Bank of India (RBI), financial institutions offer special loan products and interest rates for them.

5. Protection Against Delayed Payments


Delayed payments from buyers, especially large companies and government bodies, can hurt small businesses. Udyam Registration protects MSMEs under the MSME Development Act, 2006.

According to the rules:

  • Buyers must make payments to MSMEs within 45 days from the date of delivery or service.


  • If payments are delayed, the buyer has to pay interest at three times the bank rate notified by the RBI.


6. Preference in Government Tenders


The government reserves a certain percentage of tenders and procurement opportunities exclusively for MSMEs. After Udyam Registration, your business can:

  • Get priority in government tenders.


  • Avail exemptions from paying earnest money deposits (EMD).


  • Apply for tenders with relaxed eligibility criteria.


  • Benefit from lower tender fees.


7. Subsidies for Patent and Trademark Registration


To promote innovation and brand protection among MSMEs, the government provides financial support for patent and trademark registrations.

Udyam-registered businesses can avail up to 50% subsidy on the cost of applying for patents and trademarks. This encourages businesses to protect their intellectual property and build a strong brand identity.

8. ISO Certification Fee Reimbursement


Quality management is important for any business. To promote this, the government offers reimbursement of ISO certification charges to Udyam-registered MSMEs. This means businesses can claim back the cost of getting ISO certification, which improves business standards and builds customer trust.

9. Electricity Bill Concessions


Many state governments offer concessions on electricity bills to Udyam-registered MSMEs. By applying to the relevant department and providing the Udyam certificate, businesses can enjoy reduced electricity rates, which lowers operational costs.

10. Exemption in Direct Tax and Stamp Duty


Udyam-registered businesses may get exemptions or rebates on:

  • Income tax in certain schemes.


  • Stamp duty and registration fees on property registration or lease agreements in industrial estates.



11. Priority in Sector Lending


MSMEs are treated as a priority sector by banks under Reserve Bank of India (RBI) guidelines. This means that banks have to reserve a certain portion of their total lending for MSMEs.

Registered businesses get priority in loan approvals, quicker disbursal, and easier eligibility for various credit products. This makes it simpler for MSMEs to access financial support as and when needed.

12. Financial Assistance for International Trade


The government encourages MSMEs to expand into global markets. Udyam-registered businesses can get financial assistance for:

  • Participating in international trade fairs and exhibitions.


  • Promoting their products overseas.


  • Availing export incentives.



This helps MSMEs find new markets, increase sales, and build international business connections.

13. Better Market Reputation


An Udyam-registered business enjoys better market reputation as it is officially recognized by the government. Customers, clients, and suppliers feel more confident dealing with businesses that are registered and certified.

It also enhances the chances of forming partnerships, collaborations, and getting investor support in the future.

14. Simple and Paperless Process


The Udyam Registration process is completely online, free, and paperless. No hard copies or physical documents are required. Business owners can easily register on the official Udyam portal by using just their Aadhaar and PAN numbers.

This makes it very easy and quick for any small business to register without hiring agents or spending extra money.

15. Permanent Registration Number and Certificate


Once registered under Udyam, your business receives a permanent Udyam Registration Number (URN) and a digital certificate. There is no need to renew it every year, saving time and effort for the business owner.

Suggested read- Find Forgotten Udyam Registration Number

Conclusion


Udyam Registration is one of the most valuable steps for Micro, Small, and Medium Enterprises (MSMEs) in India. It gives legal recognition, makes it easier to access government schemes, offers financial support, and opens new opportunities for growth.

From getting collateral-free loans to protection against delayed payments and participating in government tenders, the benefits are many. The best part is that the registration process is simple, online, and free of cost.

If you own a small or medium-sized business and haven’t registered yet, now is the best time to get your Udyam Registration done. It will not only improve your market position but also provide long-term security and government support to help your business grow.

Report this page