Step wise process of UDYAM Registration for new MSME’s
Formally, MSMEs are defined in terms of investment in plant and machinery. But this criterion for the definition was long criticized because credible and precise details of investments were not easily available by authorities. Therefore in February 2018, the Union Cabinet decided to change the criterion to “annual turnover”, which was more in line with the imposition of GST.
The Central Government, after obtaining the recommendations of the Advisory Committee, has notified certain criteria for classifying the enterprises as micro, small and medium enterprises and has specified the form and procedure for filing the memorandum (Udyam Registration), with effect from 1st July, 2020.
Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal on self-declaration. No fees is charged for applying Udyam registration. Mandatory aadhaar of proprietor or partner or promoter or director or Karta is required in case of Udyam registration.
How can an enterprise be classified as a micro, small or medium enterprise?
An enterprise on the fulfillment of the below mentioned criteria shall be classified as a micro, small or medium enterprise:-
Classified as | Maximum Investment in plant and machinery or equipment | Maximum Turnover |
Micro enterprise | Rs 1 crore | Rs 5 crore |
Small enterprise | Rs 10 crore | Rs 50 crore |
Medium enterprise | Rs 50 crore | Rs 250 crore |
If an enterprise crosses the ceiling limits specified for its present category in either of the two criteria of investment or turnover, it will cease to exist in that category and be placed in the next higher category.
No enterprise shall be placed in the lower category unless it goes below the ceiling limits specified for its present category in both the criteria of investment as well as turnover.
All units with GSTIN listed against the same PAN shall be collectively treated as one enterprise and the turnover and investment figures for all of such entities shall be seen together.
Only the aggregate values will be considered for deciding the category as micro, small or medium enterprise.
How to calculate investment in plant and machinery and Turnover for MSME’s?
In case of existing enterprise the investment amount is calculated considering the details mentioned in the last ITR. In case of new enterprise a self-declaration of the promoter is required to consider the investment amount.
Inclusion and exclusion in calculation of amount of Investment:
Inclusion:
a. All Tangible assets
b. Purchase value of first hand or second hand plant and machinery excluding GST.
Exclusion:
a. Land and Building
b. Furniture and Fixtures
Inclusion and exclusion in calculation of amount of Turnover:
Turnover details in case of new enterprise shall be details mentioned in the last ITR. In case of new enterprise a self-declaration of the promoter is required to consider the investment amount.
Penalty in case of misrepresentation:
Penalty for misrepresents or attempts to suppress the self-declared facts and figures shall be punishable:
a. In case of 1st Conviction, with fine which may extend to Rs. 1000/- and
b. In case of 2nd or subsequent Conviction with fine which shall not be less than Rs. 1000/- but may extend to Rs. 10,000.
Procedure for UDYAM registration for new enterprise:
The following is the process for UDYAM registration:
Step 1: Go to https://udyamregistration.gov.in/

Click on “For new Enterpreneurs who are not registered yet as MSME” option.
Step 2: Fill your Aadhaar no, name as per aadhaar and click on “Validate & Generate OTP”

Enter the OTP number that you have received in your mobile number and select Validate. Your Aadhaar no will be validated successfully.
Step 3: PAN Verification

Select the type of organization and enter your PAN no and click on validate. Your PAN will be validated. Your PAN will be validated.
Step 4: Filling of Udyam registration form

After the PAN is validated fill the following details:
a. Mobile no and E mail id
b. Social Category and Gender
c. Name of Enterprise and Address of office
d. Date of incorporation
e. Select, whether production is commenced or not
f. Date of commencement of business
g. Bank details of the entity
h. Major activity of the business unit i.e. Manufacturer or service unit
i. National Industry Classification (NIC) Code for Activities(One or more activities can be added)
j. Number of persons employed
k. Amount invested in plant or machinery
l. Check yes or no if you are interested to get registered on Government e-Market (GeM) Portal
m. Check yes or no if you are interested to get registered on TReDS Portal
n. select the District Industry centre from the drop down
After filing the above details select on agree terms and conditions check box and click on “Submit and Get final OTP”
Enter the OTP received on mobile and click on “Final submit” button.
Once you click on ‘Submit and Get Final OTP’you will receive a registration number. Once all your information is verified by the Government, you will receive an E-registration document on your e-mail id.
Government has organised a full system of Facilitation for Registration Process
- An enterprise for the purpose of this process will be known as Udyam and its Registration Process will be known as ‘Udyam Registration’
- A permanent registration number will be given after registration.
- After completion of the process of registration, a certificate will be issued online.
- This certificate will have a dynamic QR Code from which the web page on our Portal and details about the enterprise can be accessed.
- There will be no need for renewal of Registration.
- Our single window systems at Champions Control Rooms and at DICs will help you in the process.
MSME Registration is free, paperless and based on self- declaration
- MSME registration process is fully online, paperless and based on self-declaration.
- No documents or proof are required to be uploaded for registering an MSME.
- Only Adhaar Number will be enough for registration.
- PAN & GST linked details on investment and turnover of enterprises will be taken automatically from Government data bases.
- Our online system will be fully integrated with Income Tax and GSTIN systems.
- Having PAN & GST number is mandatory from 01.04.2021.
- Those who have EM-II or UAM registration or any other registration issued by any authority under the Ministry of MSME, will have to re-register themselves.
- No enterprise shall file more than one Udyam Registration. However, any number of activities including manufacturing or service or both may be specified or added in one Registration.
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