MSME / Udyam Registration

What is Udyam registration?

Udyam registration is the government's registration for micro, small, and medium enterprises (MSMEs). It's free, online, and based on self-declaration, using Aadhaar and PAN, with investment and turnover data drawn from income-tax and GST records.

Registration gives a business an Udyam Registration Number and certificate, classifying it as micro, small, or medium. That classification unlocks legal protection on delayed payments, easier access to credit, and preferences in government procurement.

The key terms

A few terms explain how Udyam works:

Classification

From April 2025: micro — investment up to ₹2.5 crore and turnover up to ₹10 crore; small — up to ₹25 crore and ₹100 crore; medium — up to ₹125 crore and ₹500 crore. Both limits must be met.

Investment

Investment in plant and machinery or equipment, taken from the income-tax return, excluding certain items.

Turnover

Turnover excluding exports, drawn from GST and income-tax data.

45-day payment rule

Under the MSMED Act, buyers must pay micro and small enterprises within 45 days where agreed in writing, or 15 days otherwise, with compound interest on delays.

MSE Facilitation Council

A state-level council where micro and small enterprises can take delayed payment disputes for conciliation and arbitration.

Tax deduction link

Buyers can't deduct amounts owed to micro and small enterprises beyond the MSMED time limit until paid.

Traders

Retail and wholesale traders can register on Udyam for priority sector lending, though some benefits are limited.

Why register

Udyam registration is free, and the benefits are practical:

Faster payments

The 45-day rule, interest on delays, and buyers' tax incentive to pay on time put micro and small enterprises in a stronger position.

Dispute resolution

Delayed payment claims can be taken to the state MSE Facilitation Council.

Credit access

MSME loans count as priority sector lending, and collateral-free loans are available under credit guarantee schemes.

Government procurement

Micro and small enterprises get preferences in public procurement, including exemptions from earnest money deposits in many tenders.

State incentives

Many state industrial policies offer incentives to registered MSMEs.

Customer requirements

Large buyers often ask for Udyam status to track MSME dues for their own reporting.

It's free

There's no government fee to register.

Who is this for?

Classification is updated automatically from tax data. If a business grows beyond the limits, it moves up a category or out of MSME status, with a transition period for some benefits.

MSME categories (from April 2025)

Both investment and turnover must be within the limits:

What we'll need from you

Aadhaar

Of the proprietor, managing partner, or authorised director.

PAN

Of the business.

GSTIN

Where the business is registered for GST.

Business details

Activities, NIC codes, and number of employees.

Location

Addresses of the plant or office.

Bank details

Business bank account details.

Udyam registration has no government fee.

How registration works

Registration is straightforward:

1. 1

   Check eligibility

   We confirm the business fits the MSME limits and which category applies.

2. 2

   Aadhaar verification

   The authorised person verifies their Aadhaar with an OTP.

3. 3

   PAN and GSTIN

   PAN and GST details are validated, and investment and turnover drawn from tax data.

4. 4

   Business details

   Activities, NIC codes, locations, and employees are entered.

5. 5

   Submit

   The application is submitted and the Udyam number issued.

6. 6

   Download the certificate

   The e-certificate is downloaded and shared with customers and banks.

Using your Udyam registration

Registration is only useful if you use it:

Put it on invoices

Show your Udyam number on invoices and quotations.

Tell your customers

Update supplier forms with large customers, so they track your dues.

Agree payment terms in writing

Written terms up to 45 days strengthen your position under the MSMED Act.

Use the Facilitation Council

Take unresolved delayed payments to the state MSE Facilitation Council.

Keep details current

Update the registration if activities, locations, or details change.

Check your category

Classification updates from tax data; check it each year.

Benefits and responsibilities