If you’re looking for a business loan, your Udyam Registration is one of the supporting documents you can give the lender to get the loan.
The Udyam Registration Portal was launched in 2015. Overseen by the Ministry of Micro, Small and Medium Enterprises, Government of India (GoI), the Portal provides a unique identification number to each business operating at the micro, small or medium level in India. If you are an MSME operating in India, it is mandatory for you to register under the Udyam programme, which was formerly known as Udyog Aadhaar.
What is an Udyam Registration?
The Udyam Registration is a Unique Identification Number issued to Micro, Small and Medium Enterprises (MSMEs) by the Ministry of Micro, Small and Medium Enterprises, GoI. Formerly known as Udyog Aadhaar, all businesses that fall within the definition of MSME can obtain an Udaym Registration for their enterprise through the Udyam Registration Portal.
All enterprises registered with the Udyog Aadhaar programme are also required to register on the Udyam Registration Portal as any Udyog Aadhaar issued before 30th June 2020 expired on 31st March 2021. Therefore, all these businesses were required to re-register on the Udyam Aadhaar Registration portal before 31st March 2021.
What is the Udyam Registration Certificate?
The Udyam Registration Certificate is issued to MSMEs registered with the Ministry of MSME. The Certificate contains your Udyam Registration Number, the classification of your enterprise (Micro, Small, or Medium), and other particulars about your business like your date of incorporation and commencement of business.
Businesses with an Udyam Number can also access certain benefits and schemes earmarked for MSMEs but the GoI.
Here is a sample of an Udyam Registration Certificate.
Who can get an Udyam Registration Certificate?
Any enterprise that can be classified as a Micro, Small, or Medium Enterprise as per the Government of India guidelines qualifies for an Udyam Registration Certificate. However, remember that you will need an Aadhaar number to get an Udyam Registration. PAN and GSTIN are now also considered required documents as of 01.04.2021.
- A Micro Enterprise is one where the investment in plant and machinery or equipment does not exceed Rs. 1Cr while turnover does not exceed Rs. 5Cr.
- A Small Enterprise must have invested not more than Rs. 10Cr in plant and machinery or equipment, and the turnover should not be more than Rs. 50Cr.
- Finally, a Medium Enterprise is defined as one where the investment made in plant and machinery or equipment does not exceed Rs. 50Cr and turnover does not exceed Rs. 250Cr.
Since the Udyam portal is integrated with the Income Tax and GST systems, once you get an Udyam Number, your information on all these databases gets synced.
Is there a fee to get an Udyam Certificate?
No, there is no fee to register with the Udyam programme. This is a one-time, free-of-cost identification the government is offering MSMEs operating in India.
As your registration number does not expire, you do not need to renew your Udyam Registration once you have registered it. The process to apply is online, and once you are registered, the system will generate your Udyam Registration Certificate online, which you can save and print if a physical copy is needed.
Can I use my Udyam Certificate to get a business loan from a bank or an NBFC?
Yes, you can use your Udyam Registration Certificate to get a business loan!
Lenders accept your Udyam Certificate as proof of business vintage when submitted with a copy of the front page of your Current Account passbook if both are at least one year old.
Your Current Account passbook contains details about your business, including the date you opened the account, which helps the lender establish your business vintage. Since the information on your Udyam Certificate is self-reported, the lender does not have any way to verify it. In such a situation, your current account information, your bank statements, and an additional business registration document helps. The registration document can be your GST certificate, a trade license, etc.
When you apply for a business loan, lenders require some supporting documents with your business loan application. These help them verify and validate the information on your application and develop a 360-degree understanding of your business and its finances. The Udyam Certificate is one such document that helps lenders verify your business vintage (the age of your business). When you use CreditEnable’s free service to apply for a business loan, we’ll tell you upfront what documents you need to provide the lender to get the loan you need to grow. If you don’t have the necessary documents, our Associates will help you obtain them so that you can enjoy a hassle-free business loan process.
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