Frequently Asked Questions
Udyam Registration, also known as MSME Registration, is a streamlined process introduced by the Ministry of MSMEs in India. It aims to simplify the registration procedure for Micro, Small, and Medium Enterprises (MSMEs) by providing a digital platform. Through Udyam Registration, businesses can obtain an Udyam Recognition Certificate and a Unique Number, essential for legal and operational certification. This initiative reflects the government’s commitment to supporting small and medium businesses in India by digitizing processes and providing necessary assistance for growth.
Any business entity that qualifies as a micro, small, or medium enterprise based on their investment in plant and machinery or equipment and turnover can apply for Udyam Registration. The criteria for each category are as follows:
- Micro Enterprises: Investment up to Rs. 1 crore and turnover up to Rs. 5 crores
- Small Enterprises: Investment between Rs. 1 crore to Rs. 10 crore and turnover between Rs. 5 crores to Rs. 50 crores
- Medium Enterprises: Investment between Rs. 10 crores to Rs. 50 crore and turnover between Rs. 50 crores to Rs. 250 crores
Udyam Registration provides several benefits to registered MSMEs, including:
- Eligibility for government schemes and subsidies.
- Easy access to credit facilities with lower interest rates.
- Protection against delayed payments through the MSME Act.
- Preference in government procurement tenders.
- Various tax benefits and exemptions.
- Enhanced credibility and trust among customers and stakeholders.
- Access to MSME-specific support and initiatives.
While Udyam Registration is not mandatory, it is highly recommended for MSMEs as it provides access to various benefits and opportunities offered by the government. Many government schemes and initiatives are exclusively available to registered MSMEs, making Udyam Registration beneficial for business growth and sustainability.
You can apply for Udyam Registration through the official portal at https://udyamregistration.gov.in/. The process involves providing details about your business, such as Aadhaar number, PAN number, business name, type of enterprise, investment in plant and machinery, turnover, etc. You will also need to upload supporting documents as per the requirements.
The documents required for Udyam Registration include:
- Aadhaar card of the applicant
- PAN card of the business entity
- Details of the business entity (name, address, type, etc.)
- Investment in plant and machinery or equipment
- Turnover of the business entity
- GSTIN (if applicable)
- Additional documents may be required based on the type of business and category of enterprise.
No, there is no fee for Udyam Registration. It is a free online registration process provided by the government to promote and support MSMEs in India.
How long does it take to get Udyam Registration after applying?
Udyam Registration is typically issued immediately after successful submission of the application and verification of documents. The registration certificate is generated online and can be downloaded from the portal.
Can I update or modify information in my Udyam Registration certificate?
Yes, you can update or modify information in your Udyam Registration certificate by visiting the Udyam Registration portal and using the edit/update facility. However, certain changes may require supporting documents or verification.
CGT-MSE stands for Credit Guarantee Fund Trust for Micro and Small Enterprises. It is a trust set up by the Government of India to provide credit guarantees to lenders (banks and financial institutions) for loans given to Micro and Small Enterprises (MSEs).
To ensure the successful execution of this Credit Guarantee Scheme for all Micro and Small Enterprises, the Government of India has collaborated with SIDBI (Small Industries Development Bank of India) and the Ministry of Micro, Small, and Medium Enterprises to establish a trust named The Credit Guarantee Trust Fund Scheme.
The Government of India has introduced a major benefit for small and micro-business sectors by offering access to credit without requiring collateral. This initiative ensures crucial funding for enterprises in these sectors, including both established businesses and new ventures. Providing bank credit without the complexities of collaterals or third-party guarantees can greatly support first-generation entrepreneurs in achieving their goal of establishing their own Micro and Small Enterprise (MSE).
The primary objective of CGT-MSE is to facilitate credit availability to MSEs by providing a credit guarantee cover for their loans. This encourages lenders to extend credit to MSEs without the need for collateral or third-party guarantees.
Micro and Small Enterprises (MSEs) engaged in manufacturing or service activities are eligible to apply for CGT-MSE Loans. These enterprises should meet the eligibility criteria specified by the lender and CGT-MSE guidelines.
The benefits of CGT-MSE Loans include:
- Credit guarantee cover for loans up to a specified limit, reducing the risk for lenders.
- No requirement for collateral or third-party guarantees from MSEs.
- Enhanced credit access and affordability for MSEs, leading to business growth and expansion.
- Simplified loan approval process with reduced documentation requirements.
CGT-MSE works by providing a credit guarantee cover to lenders for loans given to MSEs. When an MSE applies for a loan, the lender assesses the creditworthiness of the borrower and the viability of the business. If the loan meets CGT-MSE guidelines, the trust provides a guarantee cover to the lender for a portion of the loan amount, reducing the lender’s risk.
The maximum loan amount covered under CGT-MSE depends on the category of MSEs:
- For Micro Enterprises, the maximum loan amount covered is up to ₹25 lakh.
- For Small Enterprises, the maximum loan amount covered is up to ₹50 lakh.
The tenure of CGT-MSE Loans typically ranges from 3 to 5 years, depending on the repayment capacity and terms agreed upon between the borrower and the lender.
The documents required for applying for CGT-MSE Loans may include:
- Business registration documents
- KYC documents of the business owner(s)
- Financial statements (balance sheet, profit and loss statement)
- Project report or business plan
- Loan application form
- Other documents as per the lender’s requirements and CGT-MSE guidelines
The Pradhan Mantri MUDRA Yojana (PMMY) is a government scheme introduced on April 8, 2015, aimed at providing loans of up to ₹10 lakh to small and micro enterprises that are non-corporate and non-farm in nature. These loans are categorized as MUDRA loans within the PMMY framework.
Micro enterprises engaged in income-generating activities in manufacturing, trading, and services sectors are eligible for MUDRA Loans. These enterprises may include individuals from marginalized communities and typically operate outside the formal banking system.
The benefits of MUDRA Loans include:
- No requirement for collateral or third-party security.
- Affordable interest rates not exceeding 1% per month.
- Easy withdrawal using a Mudra loan card, eliminating physical visits to the bank.
- Maximum tenor of 36 months for repayment.
MUDRA Loans are offered by Public Sector Banks, Private Sector Banks, Micro Finance Institutions (MFIs), and Regional Rural Banks (RRBs) identified by MUDRA Ltd.
The documents required for MUDRA Loans include:
- Proof of identity
- Proof of residence
- Business proof
- Application form and passport size photos
- Caste certificate (if applicable)
- Other documents like quotations for commodities or items to be bought for the business
- Compulsory filing of Income Tax Returns (ITR) for the past 2 years
The interest rates for MUDRA Loans depend on the profile of the applicant and are decided by the lender after scrutinizing the business requirements.
Activities covered under MUDRA Loans include:
- Food products sector
- Transport vehicles for goods and passengers
- Social, personal, and community service activities
- Business loans for shopkeepers and traders
- Textile products sector activities
- Agriculture-related activities
- Equipment finance scheme for Micro Units