‘MFDs looking to expand business should consider getting Udyam registration’

Micro, Small and Medium Enterprises (MSMEs) are considered to be a strong pillar of the Indian Economy. In fact, 6.5 crore MSMEs contribute 30% of GDP. This highlights their significance in the overall economic growth. The government strives to provide requisite support to these enterprises through various schemes and initiatives.

MFDs can avail benefits of MSMEs by opting for Udyam registration. The registration gives access to cheaper capital, which can be deployed to expand business.

We spoke to Nashik MFD Amalaraj Marian who shared with us how he has got his financial distribution business registered as MSME on the Udyam portal and its benefits.

Amalaraj who currently runs his business as a proprietorship firm ‘AMFinserve Financial Services’ offers mutual funds, insurance, bonds and postal schemes.

Let us understand the eligibility, registration as well as associated benefits from Amalaraj as he shares with us his personal experience.

• When is an enterprise classified as a micro, small or medium enterprise?

Both the above criteria must be met simultaneously. For example, an enterprise is classified as a micro enterprise when its investment in plant and machinery or equipment is less than Rs. 1 crore and its turnover is less than Rs. 5 crore.

MFDs can include office set up cost and assets under advisory to qualify for the MSME registration.

• What is the registration process?

The registration can be done online on the portal https://udyamregistration.gov.in and requires Aadhaar number. Here is the list of signatories whose Aadhaar is needed.

With effect from 1 April 2021, it is necessary to have PAN and GSTIN for the registration. This indicates that MFDs earning Rs.20 lakh a year and having GST registration number qualify for this Udyam registration. If you earn less than Rs.20 lakh but have GST registration, you can go for Udyam registration.

The Udyam portal is integrated with Income Tax and GSTIN systems. Investment and turnover details linked to PAN and GST will be automatically fetched from government databases.

The registration is free of cost and is not subject to renewal.

An enterprise is assigned a permanent identity number, known as Udyam Registration Number. Also, an e-certificate i.e. Udyam Registration Certificate is issued on completion of the process. The e-certificate will have a dynamic QR code through which the portal’s webpage and enterprise’s details can be accessed.    

Those having EM-II (Entrepreneurship Memorandum-II) or UAM (Udyog Aadhar Memorandum) need to re-register on the said portal.

Amalaraj registered on the portal last year. He said that the registration process is entirely paperless. “As the portal is interlinked with Income Tax and GSTIN systems, the requisite details populate automatically. It is useful to keep Aadhaar, PAN, GST, registration number under the Shop and Establishments Act, last two years financial numbers, etc. handy. The entire registration process is smooth and it hardly takes 30 minutes of your time”

• How can the registration benefit MFDs?

Amalaraj said that benefits of MSME schemes can be availed through Udyam registration. This includes subsidised interest rates for cheaper access to capital. MFDs looking to expand their business can explore this option as the loans to MSMEs are available at cheaper rates, he said.

He also pointed out that the registration gives a new identity to an MFD, which will be of great help to acquire large corporate entities. “You can reach out to other MSMEs and large corporates if you have Udyam registration. It simply shows that you have an institutional set up and increases your credibility.”

If you have any other query related to Udyam registration, you can write to us in the comment section below.