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Udyam Registration for MSME (1st July 2020)

Ashish M. Shaji

| Updated: Jul 25, 2020 | Category: MSME Registration

Udyam Registration

The Ministry of MSME on 26th June 2020 specified a new form and procedure of filing the memorandum known as the Udyam Registration, and it shall be in effect from 1st July 2020. The Central Government made this decision after receiving the recommendations from the Advisory Committee.

Classification of Enterprises

The enterprise will be classified as micro, small, or medium enterprise according to the following criteria:

Classification of Enterprises
  • A Micro Enterprise is the one wherein the investment in Plant and Machinery or Equipment does not exceed rupees 1 crore, and turnover does not exceed rupees 5 crore;
  • A Small Enterprise is the one wherein the investment in plant and machinery or equipment does not exceed 10 crore rupees, and turnover does not exceed 50 crore rupees; and
  • A Medium Enterprise is the one where the investment in plant and machinery or equipment does not exceed 50 crore rupees, and turnover does not exceed 250 crore rupees.

Where an enterprise crosses the ceiling limits mentioned in its present category in either of the two criteria of investment or turnover, it shall no more be in that category and shall be placed in the next higher category. It may be noted that no enterprise will be placed in the lower category except if it goes below the ceiling limits mentioned for its present category in both criteria.    

Process of MSME Udyam Registration

The process for establishing a Micro, Small, and Medium Enterprise is as follows:

Process of MSME Udyam Registration
  • File for registration of udyam online
    • Based on self-declaration.
    • No requirement of uploading documents, papers, certificates or proof.
  • No registration fee shall be payable.
  • In order to register adhaar number of the applicant is required.
  • In case of a proprietorship firm, the adhaar number shall be of the proprietor, and in case of a partnership firm, the adhaar of managing partner is required, and in case of a Hindu Undivided family, of a Karta.
  • In case of a Company or an LLP or a co-operative society or a society or a trust, the organization or its authorized signatory will provide its GSTIN, PAN and Adhaar number.
  • No enterprise will file more than one registration; however, any number of activities, including manufacturing or service or both, can be specified or added in one registration of Udyam.
  • The Champion control room working in various institutions and in the offices of MSMEs, including the development institutes, shall act as Single Window Systems for facilitating the meme registration process and handholding the MSMEs in all manners possible.
  • Once the registration is completed, an Udyam Registration Number (URN) will be allotted.
  • An Udyam registration certificate (E-certificate) shall be provided on completion.

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Facilitation and grievance redressal of enterprises

In case where any person is unable to file the registration for any reason including the reason for lack of adhaar number can approach any of the Single Window Systems for registration purpose under Udyam with his or her Adhaar enrolment identity slip or adhaar enrolment request copy or bank photo passbook or voter identity card or passport or DL (Driving License) and the Single Window Systems shall facilitate the process including receiving an adhaar number.

Process to be followed in case of Complaint

Where any discrepancy or complaint is reported, the General Manager of the district industries centre of the concerned district will undertake the inquiry for verifying the details of the registration submitted by the enterprise and will forward the matter with remarks to the Director or Commissioner or Industry Secretary of the State Government.

The concerned shall issue a notice to the enterprise and provide an opportunity to it to present its side, and based on the findings, it shall amend the necessary details or may recommend to the ministry of Micro, Small, and Medium Enterprise to cancel the registration certificate.

The registration process of Existing Enterprises

All existing registered enterprises under EM part II or UAM (Udhyog Adhaar Memorandum[1]) shall register again on the registration portal of Udyam on or after 1st July 2020. All enterprises registered till 30th June 2020 will be reclassified as per this notification. The existing enterprises registered before 30th June 2020 will continue to be valid only till 31st March 2021.

Updation of information

An enterprise having URN shall update its information online in the Udyam registration portal, including the details of the income tax return and GST return of the previous financial year and any other additional information, on a self-declaration basis. In the case where the updation of information is not made in the predefined time period, the enterprise shall be liable for suspension of its status.

Based on the furnished information or gathered from governmental sources, including Income tax return or GST return, the classification of the enterprise shall be updated.

A communication shall be made to the enterprise about the change in status, in case of graduation from lower to a higher category or reverse graduation from higher to lower category of an enterprise.

MSME Udyam Registration Penalty

In case where a person intentionally misrepresents or attempts to suppress the self-declared facts and figures displayed in the registration or updation process will be punished with the following:

  • Upon a first conviction, a fine which may extend to 1000 rupees;
  • And upon subsequent conviction, a fine which is not less than 1000 rupees but may extend to 10000 rupees.

Conclusion

The MSME ministry has assured that the Udyam registration process shall be simple, seamless and entrepreneur friendly. It is expected to set an example globally with respect to ease of doing business.

Also read: What are some of the policy measures to uplift MSME sectors?

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Ashish M. Shaji

Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on criminal and corporate law. He is a creative thinker and has a great interest in exploring legal subjects.

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