The Udyam Certificate is a government-issued document in India that provides recognition to micro, small, and medium enterprises (MSMEs). It is a part of the Udyam Registration process introduced by the Ministry of Micro, Small, and Medium Enterprises (MSME) in September 2020. The Udyam Registration is an online process for businesses to register themselves as MSMEs and obtain the Udyam Certificate.
How it differs from the earlier system of MSME registration?
The Udyam Certificate system represents a significant shift from the earlier system of MSME registration in India. Here are key differences
Single Registration Process
The Udyam Registration replaced the earlier systems of MSME registration, including the Udyog Aadhaar Memorandum (UAM) and the EM-II (Entrepreneurs Memorandum-II). It streamlines the registration process by providing a single online platform.
Online and Self-Declaration
The Udyam Registration is entirely online, allowing businesses to easily register and obtain the Udyam Certificate. It involves self-declaration of information by the business owner or authorized signatory.
No Need for Renewal
Unlike the earlier systems, the Udyam Certificate doesn’t require renewal. Once obtained, it is valid for a lifetime, eliminating the need for businesses to periodically renew their registration.
Dynamic Updating of Information
The Udyam Registration portal allows businesses to update their information dynamically. This means that any changes in business details can be easily modified on the portal.
Linkage to Aadhar
The Udyam Registration system is linked to the Aadhaar number of the business owner or authorized signatory. This simplifies the verification process and enhances the ease of registration.
Transparent Classification
The Udyam Registration classifies MSMEs based on their investment in plant and machinery or equipment and turnover. This replaces the earlier criteria of investment in plant and machinery for manufacturing units and investment in equipment for service enterprises.
Validity period of the Udyam Certificate
Udyam Certificate does not have a validity period. Once a business entity obtains the Udyam Certificate, it is considered valid for a lifetime unless there are significant changes in the business structure or other relevant details. However, it’s essential to stay updated with any changes in government regulations, as policies can be subject to amendments.
How can businesses update or modify their information on the Udyam Certificate?
It’s crucial to note that procedures may have evolved, and it’s advisable to consult the latest guidelines or contact the official support channels provided on the Udyam Registration portal for the most accurate and up-to-date information.
Visit the Udyam Registration Portal
Access the official Udyam Registration portal, which is typically provided by the Ministry of Micro, Small and Medium Enterprises (MSME) or the relevant government authority.
Login to Your Account
Log in using the credentials you used during the registration process. This often involves entering your Udyam Registration Number.
Navigate to Update Section
Look for a section or option on the portal specifically designated for updates or modifications. This might be labeled as “Update Udyam Details” or a similar term.
Provide Necessary Information
Fill in the required fields with the updated information. This could include changes in business address, contact details, ownership details, or any other relevant information.
Upload Supporting Documents
If there are changes that require supporting documentation, such as a change in business ownership, you may need to upload the necessary documents. Ensure that these documents meet the specified format and criteria.
Review and Submit
Review the updated information to ensure accuracy. Once satisfied, submit the changes through the portal.
Acknowledgment and Confirmation
After submission, the portal may generate an acknowledgment or confirmation receipt. This
typically includes a reference number or confirmation of the successful update.
Wait for Processing
The relevant authority will process the update. The time required for processing may vary, so be patient and monitor your application status on the portal.
Check Updated Certificate
Once the update is processed, you may be able to download an updated Udyam Certificate reflecting the changes made.
Priority Sector Lending
Banks are required to lend a certain percentage of their total advances to the priority sector, which includes MSMEs. The Udyam Certificate helps in the classification of businesses under the MSME category, making them eligible for priority sector lending.
Interest Rate Benefits
MSMEs with an Udyam Certificate may be eligible for lower interest rates on loans. Financial institutions often provide preferential rates to MSMEs as part of their initiatives to support small businesses.
Collateral-Free Loans
The Udyam Certificate enhances the ease of availing collateral-free loans for MSMEs. Many
financial institutions offer schemes where MSMEs with a valid Udyam Registration can access loans without providing collateral or with reduced collateral requirements.
Credit Guarantee Fund Scheme
The Udyam Certificate is linked to various government schemes, including the Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS), which provides collateral-free credit to eligible MSMEs. Having the Udyam Certificate makes businesses eligible for such schemes.
Subsidized Schemes and Incentives
Governments may introduce subsidized credit schemes and financial incentives for MSMEs. Possession of the Udyam Certificate is often a prerequisite for availing these benefits, ensuring that the businesses are officially recognized as part of the MSME sector.
Access to Government Tenders and Contracts
Many government procurement policies favor MSMEs, and having the Udyam Certificate can be a requirement for participating in government tenders. Access to government contracts can significantly boost the financial health of MSMEs.
Technology Upgradation Support
Financial institutions may provide support for technology upgradation and modernization of MSMEs. The Udyam Certificate establishes the business as an MSME, making it eligible for such assistance.
Also read: benefits of udyam registration
Conclusion
Udyam Certificate serves as a key document that not only provides official recognition to MSMEs but also unlocks various financial benefits, credit facilities, and incentives designed to support the growth and sustainability of small and medium enterprises.