Starting and running a manufacturing company requires proper legal registration to get financial and government benefits. In India, small and medium-sized manufacturing businesses can register under the Udyam Registration system. This registration is designed to support Micro, Small, and Medium Enterprises (MSMEs) by providing various incentives, subsidies, and simplified compliance.
For manufacturing businesses, Udyam Registration helps in getting loans, tax benefits, and access to government schemes that promote growth and expansion. In this article, we will explain the step-by-step process to apply for Udyam Registration for a manufacturing company, its benefits, required documents, and important things to keep in mind.
1. What is Udyam Registration?
Udyam Registration is an official government certification that recognizes a business as an MSME under the Ministry of Micro, Small, and Medium Enterprises (MSME), Government of India. This system replaces the old Udyog Aadhaar registration and provides a more simplified process for businesses to register online.
Who Can Apply?
Manufacturing businesses that fall under the MSME classification can apply for Udyam Registration. The classification is based on investment in plant machinery and annual turnover as per the following limits:
- Micro Enterprises: Investment up to Rs. 2.5 crore and turnover up to Rs.10 crore.
- Small Enterprises: Investment up to Rs. 25 crore and turnover up to Rs. 100 crore.
- Medium Enterprises: Investment up to Rs.125 crore and turnover up to Rs. 500 crore.
2. Benefits of Udyam Registration for Manufacturing Companies
Easy Access to Business Loans
One of the biggest challenges faced by MSMEs is securing loans from banks and financial institutions. Udyam Registration makes it easier for businesses to access credit without collateral. The Indian government provides collateral-free loans through schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Registered MSMEs also benefit from lower interest rates on loans, reducing their financial burden. Since the Reserve Bank of India (RBI) has given priority lending status to MSMEs, banks process loan applications faster for registered businesses. This enables small businesses to get the necessary funds for expansion, purchasing equipment, and meeting operational expenses.
Tax and Financial Benefits
Udyam-registered businesses enjoy several tax benefits and exemptions that help them reduce their financial liabilities. Certain MSMEs qualify for income tax exemptions, lowering their overall tax burden. Under the Goods and Services Tax (GST) framework, Udyam-registered businesses can opt for the GST Composition Scheme, allowing them to pay lower taxes and file GST returns quarterly instead of monthly. This simplifies tax compliance and reduces administrative work. Additionally, MSMEs that apply for trademark and patent registration receive a 50 percent subsidy on registration fees, making it easier for them to protect their intellectual property at a lower cost.
Government Subsidies and Incentives
The government provides various financial subsidies and incentives to MSMEs with Udyam Registration. One such scheme is the Credit Linked Capital Subsidy Scheme (CLCSS), which offers financial assistance for upgrading machinery and technology. Businesses looking to improve their operational efficiency and adopt modern equipment can benefit from these subsidies. MSMEs can also claim reimbursement for ISO certification costs, which helps them improve quality standards and credibility. Additionally, registered businesses receive support for export promotion, making it easier to enter global markets. They can participate in international trade fairs and exhibitions with government-backed financial assistance, allowing them to connect with international buyers.
Protection Against Payment Delays
Small businesses often face payment delays from large corporations and clients, leading to cash flow problems. Udyam-registered businesses receive legal protection under the MSME Development Act, which ensures that buyers must clear payments within 45 days of receiving goods or services. If payments are delayed, the buyer is required to pay interest at three times the bank rate. Businesses that face delayed payments can file complaints through the MSME Samadhan Portal, ensuring a faster resolution. This provision helps MSMEs avoid financial stress and focus on growing their business without worrying about unpaid invoices.
3. Documents Required for Udyam Registration
The Udyam Registration process is paperless and does not require the submission of physical documents. However, the following details are needed:
- Aadhaar Card – Of the business owner or authorized signatory.
- PAN Card – of the business or proprietor.
- Business Name Address – Basic details of your company.
- Bank Account Details – Account number and IFSC code.
- GSTIN (if applicable) – For businesses registered under GST.
- Type of Business – Proprietorship, Partnership, or Company.
- Number of Employees – Total workers in the business.
- Investment Turnover Details – Capital invested and annual revenue.
4. Step-by-Step Process to Apply for Udyam Registration for a Manufacturing Company
The process of registering a manufacturing company under Udyam is simple and completely online. Here are the steps:
- Visit Udyam Portal: Open the official Udyam Registration website.
- Enter Business Details: Fill in name, type, address, and bank details.
- Check and Submit: Review details and submit the form.
- Make Payment: Pay the registration fee online.
- Verify with OTP: Enter the OTP sent to your Aadhaar-linked mobile.
- Complete Registration: Your details will be verified and approved.
- Get Certificate: Your Udyam Registration certificate will be emailed to you
5. Common Mistakes to Avoid During Udyam Registration
Entering Incorrect Aadhaar or PAN Details
- Ensure that your Aadhaar and PAN match the official records.
- Double-check spellings before submission.
Choosing the Wrong MSME Category
- Select Micro, Small, or Medium Enterprise based on investment and turnover limits.
- If your business grows, update the category later.
Using an Inactive Mobile Number
- The OTP for verification is sent to the Aadhaar-linked mobile number. Ensure it is active.
Not Keeping Business Information Updated
- If your turnover, investment, or other details change, update your Udyam Registration information on the portal.
Avoiding these mistakes ensures a smooth registration process without delays.
6. How to Update Udyam Registration Details
If your manufacturing business changes, such as new investments, increased workforce, or address modifications, it is necessary to update your Udyam Registration.
Steps to Update Registration:
- Go to the Udyam Registration Portal.
- Click on "Update Udyam Registration".
- Enter your Udyam Registration Number (URN) and verify with OTP.
- Make the necessary changes in business details.
- Submit the updated information and download the revised certificate.
Regular updates help businesses continue enjoying MSME benefits.
Note: Now easily Print Udyog Certificate through the udyam portal.
7. Conclusion
Udyam Registration is a growth booster for manufacturing companies. It provides access to financial benefits, tax exemptions, government subsidies, and better market opportunities. The registration process is free, simple, and fully online, making it convenient for startups and existing businesses.
By registering under Udyam, manufacturing businesses can expand operations, compete in government tenders, and secure business loans easily. If you own a manufacturing company, apply for Udyam Registration today and take the first step toward long-term success.
