Impact of Udyam Cancellation Online: What Happens to Your MSME Status?

Udyam Registration is an important identity for many micro, small, and medium enterprises in India. It provides a business with official recognition as an MSME and is used for loans from banks, government schemes, and other business documentation.  However, business situations can change; a business may shut down, change its business structure, or decide that the existing Udyam Registration is no longer required. Before choosing to cancel, it is important to understand the effect on your MSMEs.

In this article, we will guide what happens to MSMEs for Udyam cancellation and how to cancel Udyam registration certificate online without any problem. 

Why a Business May Need to Cancel Udyam? 

Some common situations include:

• The business has permanently closed 
• Business stopped working 
• The business structure has changed
• During registration, incorrect data can be entered 
• Investment and turnover  upto MSME criteria 

In these cases, cancelling your certificate is the right action for the enterprise. 

What Happens to Your MSME Status After Cancellation?

One of the biggest effects is whether cancellation affects the MSME business's identity. On cancellation of a registration, the certificate will be deactivated in the system. You will not be entitled to avail MSME benefits in document submission to the bank or while participating in government tenders. You lose claim for collateral-free loans, interest subsidies, tax exemptions, electricity concessions, tender priorities, everything, including MSME.

Does Your Earlier Udyam Registration Number Remain Active? 

No, after cancelling Udyam registration dose not active your number and your number is not valid. A unique Udyam Registration Number(URN)  is received by an enterprise after registration. The MSME portal identifies it as a permanent identity number for the registered enterprise as per the state. If the registration has been cancelled, the business owner should verify the current status through the official Udyam portal before using the registration number for any new application or government scheme.

Step-by-Step Process to Cancel Udyam Registration Certificate

Follow our step-by-step guide:

Step 1: Go to Udyam Portal

Step 2: Press the "Cancel Udyam” tab

Click “Cancel Udyam”, then open the Cancel Udyam registration form

Step 3: Fill out the form

Provide information such as mobile number, email address, and Udyam registration number. Then click on the “Cancel Application” button.

Step 4: Pay the fee

Pay the nominal fee for our consultation charges

Step 5: Get executive support

Get your executive support to complete the process with OTP verification.

Step 6: Once verification is successful, you will get a confirmation mail on your registered email ID.

Cancellation vs Updating Your Udyam Details

These are two different processes for udyam registration.

Suppose your business is still running, but your address, mobile number, email ID, bank information, or business activity has changed. In such a case, update your Udyam certificate details. The updating information online, including information connected to records such as income-tax and GST data. 

Suppose your MSME-registered business shuts down or changes business activity, or for any other reason cancel your Udyam certificate. So, before you decide to cancel, check your business status and details. 

Common Mistakes to Avoid

The following mistakes should be avoided while you are cancelling your Udyam certificate:

1. Always enter the correct Udyam registration number

2. Please use the mobile number that you have used during the application.

3. Ensure you don’t require the benefits of MSME before cancelling the certificate. 

4. Not Providing Complete Information

Conclusion

If the business has closed, the Udyam certificate cancellation is important. But if your business is still operating and only some details have changed, it is best to update the registration rather than cancel or create a new one. Before you cancel, check your business status, details, and existing documents. If your business requires MSME benefits once more, you can now register your enterprise once more on the Udyam portal.