If you have registered your business with Udyam – previously known as Udyog Aadhaar- to avail the MSME benefits, there may come a time when you need to cancel the registration. While Udyam registration provides several advantages, such as easier access to loans, subsidies, and government contracts, tenders, there may be some circumstances that push businesses to change, such as a change in operations, exceeding the MSME eligibility criteria, not meeting the eligibility criteria, mergers and acquisitions, restructuring or even shutting down. In such situations, the Udyam portal allows you to cancel your registration easily. The entire process is easy and can be completed online.
In this blog, we will understand the meaning of Udyam Registration, the reasons for cancellation, the required documents, a step-by-step procedure, what happens after cancellation, and key points to keep in mind.
What is Udyam Registration?
Udyam Registration was introduced in 2020 to replace the older Udyog Aadhaar registration system. It is the government’s official platform for MSME registration. The process is simple and entirely online; it requires only an Aadhaar Card and a PAN number, and minimal documents.
Once your business is registered with Udyam, it is assigned a unique Udyam Registration Number (URN) and a certificate is given for registration, which can be used to claim the benefits:
- Easier accessibility to loans
- Access to government schemes like Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Prime Minister’s Employment Generation Programme (PMEGP), Micro and Small Enterprises, Cluster Development Programme (MSE-CDP) and Raising and Accelerating MSME Performance (RAMP).
- Protection against late payments from their clients,
- ISO certification reimbursement
- Priority in government procurement and tenders,
- Easy access to collateral-free loans,
- Preference in resolution processes under the MSMED Act, 2006
Reasons for Cancelling MSME Registration
There are many valid reasons why you may want to cancel your MSME registration, such as:
- Business closure: If your enterprise has permanently stopped operations.
- Eligibility crossed: The turnover or investment of your business has exceeded MSME thresholds:
- Micro Enterprises: The investment in plant and tools or equipment should not exceed Rs. 1 crore, and the yearly turnover of the business should not exceed Rs. 5 crores.
- Small Enterprises: The investment in plant and tools or equipment should not exceed Rs. 10 crores, and the yearly turnover of the business should not exceed Rs. 50 crores.
- Medium Enterprises: The investment in plant and tools or equipment should not exceed Rs. 50 crores, and the yearly turnover of the business should not exceed Rs. 250 crores.
- Restructuring: If you want to undergo mergers, acquisitions, a change of ownership, or a relocation of the business.
- Erroneous registration: If the MSME registration certificate was created erroneously or registered twice.
- No longer needed: You no longer wish to avail of MSME benefits.
Documents and details you will need
Before starting the cancellation process, you need to keep following details and documents ready:
- Udyam Registration Certificate (URN)
- Registered mobile number and email address
- Aadhaar and PAN of the business
- GSTIN and Income Tax Return details (if your MSME availed related benefits)
- Business closure or restructuring documents (if applicable)
Step-by-Step MSME Cancellation Process
The cancellation process is entirely online and done on the Udyam Portal. Follow the steps:
Step 1: Visit the Udyam portal
Visit the Udyam Portal and go to the Udyam registration portal and select “Update/Cancel Udyam Registration.”
Step 2: Log in with your URN and mobile number
Enter your Udyam Registration mobile number and or email address used during registration for logging in. An OTP will be sent to the mobile number and email that you need to verify for the purpose of logging in.
Step 3: Go to the cancellation section
Once you have logged in, click on the “Cancellation” option from the dashboard.
Step 4: Fill in the cancellation form
Enter the following details:
- Applicant’s name as per Aadhaar Card or PAN Card
- Business name as per Udyam certificate
- Reason for cancellation
- State and district details
- Any additional explanation if required
- CAPTCHA code and declaration
Step 5: Submit application
After reviewing details, click “Submit” or “Cancel My Udyam.”
Step 6: OTP verification and the final confirmation
A final OTP may be sent for security. Verify it to confirm your request.
What happens after cancellation?
- Your Udyam Registration status will be changed to “Cancelled” or “Inactive.”
- You will no longer be able to avail yourself of the MSME benefits, subsidies, or protections.
- If your business restarts or qualifies again for registration, you can apply for a new Udyam registration.
Implications of Cancellation
Cancelling your Udyam registration means:
- You will lose all MSME benefits, including subsidies, collateral-free loans, and procurement benefits.
- Banks and lenders may require alternative documents for credit.
- Your enterprise will no longer appear in MSME databases.
- You may reapply later, but only as a new registration.
Conclusion
Cancelling your MSME (Udyam) registration is straightforward and can be done completely online. Remember that cancelling your registration has some consequences. You won’t be able to participate in government programs, obtain subsidies, or win government contracts. Verify that your information is accurate and that you have fulfilled all compliance requirements before submitting an application for cancellation. Your business will no longer be included in the MSME framework following cancellation. If your circumstances change, though, you are free to reapply whenever you like.
