Common Errors Businesses Make During Udyam Registration

For Indian companies to be referred to as Micro, Small, and Medium Enterprises (MSMEs), Udyam registration is mandatory. It has various benefits, including the enactment of government schemes, concessions, and streamlining sanction of loans. There are a few companies that commit regular mistakes during registration under it, and it leads to an incorrect Udyam registration certificate.

In this article, we shall list the most frequent mistakes made by entrepreneurs while filling out the Udyam registration form, how to avoid them, and what to do in case they occur.

1. The wrong Aadhaar entry

While registering Udyam, it is convenient to have the Aadhaar number of the signatory or businessman handy. The most common mistake is entering wrong information into Aadhaar, such as:

• The name is incorrect.
• Incorrect, wrong, or defective Aadhaar number.

How to Prevent This Error:

• Verify your Aadhaar details are recent and accurate and match your name and the information in official identification documents before registering for Udyam registration. 
• You can also verify your Aadhaar details on the official UIDAI website before submission of the registration application.

2. Selecting the Incorrect Business Category

The process of classifying MSMEs is investment and turnover in equipment and plants. Most of the applicants fall in the wrong class, and hence, they are not eligible for government benefits. 

How to Prevent This Error:

Make sure you refer to the updated MSME classification criteria: 

• Microbusiness: Upto  ₹2.5 crore investment and Upto ₹10 crore turnover. 
• Small Business: Upto  ₹25 crore investment and Upto ₹100 crore turnover. 
• Medium-Sized Business: Upto ₹125 crore investment and Upto ₹500 crore turnover. 

Verify your financial information and select the appropriate class.

3. PAN and GST details are Incorrect

Input the Goods and Services Tax Identification Number (GSTIN) and Permanent Account Number (PAN) of the business while registering. PAN and GSTIN details in error can lead to failure in verification. 

How to Avoid This Mistake?

Verify that:

• The PAN your company has registered with the Income Tax Department is the same as yours.
• Your GST number is accurate and associated with the right company.
• You provide accurate information, free of spelling errors, as it was kept in the original documents.

4. Business Name and Address Errors

Providing a wrong business name or address is the second most frequently committed error. It should be as accessible as possible in real documents like bank statements, PANs, and GST registrations.

How to Avoid This Error?

• Verify government records for company name and address. 
• Do not type out misspellings, mistakes, and abbreviations not utilized in official documents. 
• Verify information before completing the form.

5. Inaccurate or incomplete banking information

Businesses need to enter their IFSC code, bank account number, and account number while registering Udyam. Entering the wrong details may cause a delay in government subsidies and incentives.

How to Avoid Making Such Errors?

• Furnish your company's correct bank account information. 
• Verify the IFSC code online or in the passbook. 
• Ensure the account is active and open.

6. Failure to update Udyam registration when necessary

Many businesses do not update their Udyam registration on time. The Udyam portal must be updated with any turnover, investment, or business class changes,

To Avoid This Blunder:

• Update your Udyam registration immediately when your business class changes from micro to small or medium by visiting the Update Udyam section in the Udyam registration portal.
• Make your financial accounts and ownership information current. 
• Regularly visit the Udyam portal  to see if there are any compliance requirements.

7. Downloading Udyam Registration Certificate Error

There are mistakes when organizations download their Udyam registration certificate at the time of registration. They are:

• Downloading an outdated or wrong version of the certificate. 
• Not save the Udyam certificate download PDF file of the Udyam certificate for future reference. 
• Entering the wrong details while printing the Udyam certificate.

Do not do that:

• Make use of the fresh update of the certificate from the official portal of Udyam. 
• Download and save the Udyam registration certificate securely in PDF format. 
• Download and print the certificate by submitting it with the respective Udyam number.

8. Multiple Registrations of One Company

Some people make mistakes while filing multiple registrations for a single company, and this may lead to confusion or even rejection. 

Don't do it:

• Register once only using a single business PAN and Aadhar number. 
• Do not re-submit if you have already registered and if you lost access to your udyam registration then recover your data through forgot udyam registration number. 
• Check your registration status using the Udyam Aadhar download facility.

9. Missing NIC codes

Businesses must give their National Industrial Classification (NIC) code on the Udyam registration portal to categorize their activities. Any business gives the incorrect NIC code, which determines the plan and eligibility for benefits. 

How to avoid this mistake 

• Utilize the original Udyam list of NIC codes. 
• Choose one that best describes your business profession. 
• If your business does more than one activity, then use the NIC code accordingly.

10. Not downloading or saving a copy of the Udyam registration certificate 

Many businesses complete their Udyam registration but do not download and save their certificate. It will not be readily available in the future as a result. 

How to Avoid This

• Upon successful registration, save the Udyam registration certificate. 
• Save a soft copy of the Udyam certificate in a PDF format. 
• Take the printout of the Udyam registration certificate.

Conclusion

To receive hassle-free Udyam registration and to make sure that you avail the MSME benefits they are now receiving, you must properly avoid committing Udyam registration errors. Businesses should complete the Udyam registration properly, verify the information twice, and validate PAN, GST, Aadhaar, and bank details. You can correct any previous mistakes you committed from the Udyam registration portal. Save a soft copy and download a PDF of your Udyam registration certificate for future use. With these best practices, companies are in a position to register as MSMEs successfully and gain government subsidies and monetary rewards.