Looking for a udyam registration? Go ahead with any of the udyam registrars who offer the same.
UDYAM is abbreviated from Unorganized, Discrete, and Young Entrepreneurial Mindset which means an inspiration to be an entrepreneur among people who are not yet registered under the UDYAM that could probably be due to lack of information, awareness or non-interest, etc. Udyam basically gives such budding entrepreneurs an opportunity to get encouraged and encouraged by making them registered in the local business offices in their respective states. Udyam also simplifies as it brings transparency and uniformity in doing business across India. India needs a uniform business structure and the same is provided through Udyam which encourages more and more budding entrepreneurs in India.
A lot of people believe that there are certain advantages of udyam registration. Let us have a look at them:
1) An udyam registrant can open multiple bank accounts as all banks would be willing to offer udyam eligible entrepreneurs special banking facilities without charging any specific fees or charges for the opening of such multiple bank accounts. While setting up an office, one may need many bank accounts wherein one could put small amounts ranging from Rs.5000/- to Rs.10000/- per month so that he/she could maintain his/her records properly and also receive payments regarding services rendered by him /her. This would help him/her to maintain proper records and also avoid any discrepancies in the same.
2) A udyam registrant can be exempt from securities trading registration which means that he/she does not need any specific permission or license to purchase shares of a company from its promoters or other shareholders.
3) An udyam registrant is eligible for assistance under Government Schemes such as Startup India, Standup India, etc. without the requirement of Udyam being revoked by the District Collector after availing the benefits under these schemes.
4) Unorganized sector entrepreneurs are given preference in employment at various government organizations as per the guidelines issued by the Department of Personnel & Government of India.
5) A udyam registrant may register his/her firm with the Registrar of Firms under the Ministry of Corporate Affairs and is eligible for certain benefits offered by the same.
6) An udyam registrant can avail corporate financial assistance from banks, NBFCs, and other financial institutions on the basis of documented policies framed for such purpose by the Department of Financial Services. Such avenues could also allow entrepreneurs to raise capital from markets / public or private sources if required in the future.
7) An udyam registrant may avail loans with reasonable interest rates from banks, NBFCs, and other financial institutions without any need for collateral or security. The loan application process is simple and takes less time than working capital requirements which are expected to boost the growth prospects of such enterprises in the short-to-medium term as well as create employment opportunities existent at present.
8) An udyam registrant will be eligible for exemption from Income Tax liability on his / her income for a period of 7 years from the date when he/she gets registered under Udyam. Loan installments are to be paid on a priority basis by State Financial Corporations and Banks / NBFCs with regard to sanctioned credit facilities.
9) An udyam registrant can avail exemption from registration under GST / VAT in respect of goods purchased for running of the business, subject to the conditions laid down by Govt.
It is quite clear that udyam is an important step towards uniformity in doing business across India. The idea behind this scheme was to encourage and support small-time entrepreneurs who could start working independently rather than being tied up to big corporate organizations where they would not enjoy much freedom and also have limited scope for growth as per their capabilities.
The above advantages of udyam registration are only some of the many benefits which a budding entrepreneur may get if he/she decides to register his/her firm as udyam. There are many others which an udyam registrant may avail if he/she opts to register himself/herself as udyam.
Let us take a detailed look at the advantages of udyam registration:
1) As per recent regulations, there is no restriction on the availability of funds for any such entrepreneur who has registered his/her firm under this scheme. Thus, small-time entrepreneurs would have limited fund constraints as compared to other big corporate organizations and can use their funds in accordance with their requirements rather than spending them just because they have some money lying idle in their account.
2) An udyam registrant will be eligible for assistance under Government Schemes such as Startup India, Make in India, Stand up India, etc.
3) As per the recent notification by the Department of Industrial Policy & Promotion (DIPP), the Government of India, an udyam registrant can provide employment to more than one non-family member and not just relatives/relatives-in-law as is commonly followed by most small businesses today. There will be no restriction on this aspect which means that a budding entrepreneur has full freedom to hire more than one person for his organization without any restrictions. This will also result in an increase in the number of employees at such organizations thereby leading to growth opportunities for them as well.
4) An udyam registrant may avail of corporate financial assistance from banks, NBFCs, and other financial institutions without any restrictions.
5) An udyam registrant can avail easier loans from banks, NBFCs, and other financial institutions to meet his/her growing business needs at a low-interest rate which would be much lower than the market-determined rates for non-udyam registered small businesses.
6) As per recent regulations, an udyam registrant is entitled to special bank accounts under the Pradhan Mantri Jan Dhan Yojana (PMJDY). Thus, he/she shall be allowed to open only one account in any public sector bank of his choice instead of the minimum required two accounts under PMJDY. This means that all the funds will be credited into just one single account hence making it easier for the udyam registrant to maintain financial control of his organization.
7) An udyam registrant is allowed to avail of the 50% subsidy offered by the Government of India under its Startup India scheme. Thus, he/she would get funds from Government at a subsidized rate which will be much lower than market-determined rates and thus further help in growth opportunities for his/her business organization.
8) As udyam registrations are recognized across India, an udyam registrant can do business anywhere in India without having to register separately in each state as per businesses laws prevailing there. This shall also save time and money thereby allowing the budding entrepreneur to focus more on building his/her business rather than worrying about legal aspects.
9) As per recent amendments, an udyam registrant will be allowed to raise funds for his/her business from family members and relatives only. Thus, he/she would not have to take loans from outsiders which may affect the consistency of his/her business in the future owing to its current financial health. It shall also ensure that more money reaches the hands of such small-time entrepreneurs thus contributing towards their growth rather than going into accounts of large corporates where they often lose their way in sustaining due to lack of adequate financial resources.
Suggested Read- Print Udyam Registration Certificate
10) An udyam registrant can attract foreign investment for the development and growth of his organization without any restrictions as per recent amendments introduced by Government policymakers. This shall ensure that more small businesses get access to foreign funds thereby allowing their businesses to grow faster than before.