Today, the fast-moving business environment has raised many compliance issues with the regulatory frameworks concerning micro, small, and medium enterprises. As the ever-growing pile of paper and requirements often drags business operations in various directions unrelated to it, MSMEs look towards simple process mechanisms to ease business activity. A process called Udyam Registration was introduced by the Indian government, which made regulation much easier for MSMEs.
Key Features of Udyam Registration:
• digital and paperless process. No requirement for physical documents.
• Single registration for multiple activities tracking and compliance
• No cost for registration
• Lifetime registration. Only details will be updated when changed.
Compliance Loads on the MSME:
Some of the common compliance issues under which MSME suffers are:
1. Taxation and Financial Reporting: Making periodic GST returns and maintaining correct financial records.
2. Licence and Permission: Industry-specific
3. Labour Law Compliance: All the benefits and welfare to the employees
4. Environmental Norms: Sustainability and pollution norms control
All these become a huge issue for this small business enterprise as there might be not much to its credit. Udyam Registration thus brings about quite a difference in easing all these things.
How Udyam Registration Makes Easy the Issue of Compliance?
1. Eases documentation
Udyam Registration offers one single database for information and facilitates paperless documentation, Entrepreneurs are required to provide only an Aadhaar number, PAN, and details of their bank account to complete the registration.
2. Relief from Certain Audits
Audits of certain conditions on registered MSMEs relieve them from wastage of valuable time and effort. For example
• Easy GST compliance for micro-enterprises
• Financial reports easy for small businesses
3. Access to Government Programs
Once registered, MSMEs can directly avail of government schemes, including the following:
• Subsidized Credits: At relatively lower interest rates under credit guarantee schemes.
• Tax Incentives: Special exemptions and incentives towards the MSMEs.
• Skills Enhancement Programs: Training and resources to improve the standard quality of the workforce.
4. Priority in Procurement
Public Procurement Policy states that the minimum percentage of government procurement should be through MSMEs. Udyam-registered enterprises are eligible for this benefit and also an opportunity for bigger deals.
5. Less Inspection
The inspections and compliance audits are undertaken less frequently and with much less strictness on the daily working of Udyam-registered businesses.
Why Udyam Registration must be undertaken by MSMEs?
1. Straight Forward Compliance Procedure
Udyam streamlines the complex process of MSME that had a sophisticated procedure and even made a paperless thing.
• Single-Window Registration: It does several registrations and certifications for one window registration.
• Lighter Audits and Reporting: The registered MSME under Udyam gets freed from extreme audits, even with lighter reporting as they save much time and resources.
2. Benefits from Government schemes and policies
The government is offering a long list of exclusive plans that the Udyam-registered companies only can avail of.
• Credit Support:
a.) Collateral-Free Loans: under CGTMSE, loans are available without collateral
b.) Lower Interest Rates: The MSMEs, who have themselves registered under Udyam, can avail of lower interest rates under several plans.
• Subsidies and Incentives:
a.) Relieving electricity tariffs and money for the upgradation of technology
b.) Export Incentives to increase Foreign Trade.
• Reimbursement of Certifications: ISO and other quality certifications can be availed as reimbursement, hence promoting the quality.
3. Procurement Priority by Government
A percentage of the government's tenders are kept exclusively for MSMEs under the Public Procurement Policy. The entities registered under Udyam get first preference in the tenders that help gain big government deals.
• Easy Application: Udyam registration is often a pre-condition for MSMEs to apply for these tenders.
• Increased exposure to markets: The better the government contracts procurement will be, the greater the upward pull that the MSME will garner in terms of credibility and visibility
4. Relief and assistance through finance
Udyam Registration will give a MSME financial respite and help
•Protection from late payment
a) If an MSME has been registered under the MSDE Act then they are safeguarded by law and the buyer will pay them in time
b) In case of delayed payments, MSEFC and Micro, Small Enterprise Facilitation Councils can be used as a platform to solve disputes by the government.
•Tax Benefits: Through which the financial burden will be significantly decreased and various tax exemptions and rebates will be availed upon registering with Udyam by companies.
5. Increased Credibility and Market Confidence
Including customers, suppliers, and investors, Udyam Registration will give a business more credibility and authenticity to its stakeholders.
• Branding Edge: It builds trust and goodwill in the market also if it is a government-registered MSME.
• Investor Confidence: Investors and financial institutions are likely to be in favor of registered units as it is believed to be more reliable and adhere to the norms.
Fallacies associated with Udyam Registration
• "It is only for manufacturing units."
Reality: Udyam Registration is mandatory for both manufacturing as well as services sector.
• "The process is very costly and time taken."
Reality: Free of charge, it will only take a few minutes to finish online.
Conclusion:
Udyam Registration is more than just compliance. It leads MSMEs on the path towards growth and sustainability. By streamlining processes that give access to finance and avenues to new opportunities, Udyam Registration is liberating owners of businesses to innovate and expand as it will free them from the hassle of paperwork.
It would be very important for entrepreneurs and small business owners to get themselves registered on Udyam to build compliant, credible, and competitive enterprises.
