How to Register a Partnership Firm in MSME (Udyam)?

Do you have a partnership firm? Do you want to scale your business, access government benefits, and gain recognition?

Registration with MSME (Udyam) is an official recognition to conduct business with the government and Public Sector Undertakings (PSUs). The process of obtaining Udyam Registration is simple, free of cost, and entirely digital. Any business entity registered in India is eligible to apply for Udyam Registration.

In this blog, we will learn how to register a Partnership Firm under the MSME framework, including the benefits, process, required documents, and frequently asked questions.

What is an MSME?

The Ministry of Micro, Small, and Medium Enterprises introduced Udyam Registration, which is classified on the basis of investment in machinery and plant. Udyam Registration helps the government classify and track Indian businesses based on their investment in plant and machinery and annual turnover.

MSME Classification (From 1st April 2025)

What is Udyam Registration?

Udyam Registration is the official government registration for MSMEs. It replaced the old system of Udyog Aadhaar and made the process entirely online, paperless, and cost-free.

Can a Partnership Firm Register under Udyam?

Yes, absolutely. A registered Partnership Firm under the Indian Partnership Act, 1932, can apply for Udyam Registration. The business must be involved in either manufacturing or service-related activities and must meet the MSME criteria based on investment and turnover.

Benefits of Udyam Registration for Partnership Firms

Registering your Partnership Firm under Udyam opens doors to several incentives and protections designed to boost small business growth:

• Easier Access to credit: Registered MSMEs are qualified for collateral-free loans and usually get loans at interest rates up to 1.5% lower than the standard rates.
• Access to Government Schemes and Incentives: Registered MSMEs can avail themselves of financial assistance programs from the Government of India. For example, the Credit Linked Capital Subsidy Scheme (CLCSS) offers subsidies to help offset the cost of technology upgrades and equipment purchases.
• Preference in Tenders: Many government tenders and contracts reserve a portion of tenders exclusively for MSMEs. This preferential treatment increases the chances of securing contracts in the public sector.
• Simple Registration: The Udyam Registration process is entirely online and paperless. MSMEs can easily register themselves at the online portal without the hassle and burden of heavy paper documents.
• Custom Duty Benefits: MSMEs can avail themselves of concessions on customs duties for importing raw materials and capital goods. Imported raw materials are eligible for lower duties under the Import of Goods at Concessional Rate (IGCR) program. The Authorised Economic Operator (AEO) designation, which offers benefits like Direct Port Delivery (DPD) and Direct Port Entry (DPE), which allow quicker customs processing and freedom from bank guarantees, is another advantage available to MSMEs. Additionally, MSMEs can get subsidies for ISO certification, concessions on electricity bills, etc, such as:
• Tamil Nadu 50% grant for setting up effluent treatment plants and a 25% capital subsidy for micro-enterprises on plant and machinery purchases.
• Uttar Pradesh provides a 50% interest subsidy for micro-enterprises and complete exemption from stamp duty in certain areas.
• Gujarat provides complete exemption from electricity duty for five years and a 50% subsidy on expenses related to new technology acquisition.

Who Can Apply for Udyam Registration?

The following business entities can register on the Udyam portal:

• Sole Proprietorships
• Partnership Firms
• Limited Liability Partnerships (LLPs)
• Private Limited Companies
• Hindu Undivided Families (HUFs)
• Trusts and Societies
• Co-operative Societies

Documents Required for Udyam Registration

You need the following documents for Udyam Registration:

• Aadhaar card of any one partner
• PAN card of the partnership firm
• Partnership deed
• Business address proof (utility bill/rent agreement/NOC)
• Bank account details
• Email ID and mobile number for OTP verification
• GSTIN (optional but recommended)
• Details of the nature of business activity
• National Industrial Classification Code
• Investment & Turnover Details

Step-by-Step Process to Register a Partnership Firm under MSME

The MSME registration process at Udyam is entirely free and paperless. Follow the step-by-step guide to register yourself at the Udyam Registration Portal:

Step 1: Visit the Official Udyam Registration Portal at https://udyamregistration.gov.in/

Step 2: Choose the Appropriate Registration Option: On the homepage, you will find options for new entrepreneurs and those already having Udyog Aadhaar registrations.​ If you are a new entrepreneur, click on the option labeled “For New Entrepreneurs who are not Registered yet as MSME or those with EM-II.“

Step 3: On the portal, enter your Aadhaar Details. After entering the details, click on “Validate & Generate OTP.” An OTP (One-Time Password) will be sent to your registered mobile number linked with Aadhaar. Enter this OTP to verify the details.

Step 4: Enter your PAN details

Step 5: Enter the details of your business:

• • Enterprise Name: The legal name of your business.​
  • Type of Organization: Select from options like Proprietorship, Partnership, LLP, Private Limited Company, etc.​
  • Business Address: Principal place of business operations.​
  • Date of Commencement of business: When your business started operations.​
  • Previous Registration Details: If registered previously under EM-II or UAM, provide those details.​
  • The bank details of the enterprise, including the IFSC code.

Step 6: Select the primary activity of your business and select the appropriate National Industrial Classification (NIC) Code that corresponds to your business activity.

Step 7: Enter the Investment and Turnover Details of your business

Step 8: Submit the details and generate the OTP

After filling in all the required details, accept the declaration at the end of the form. Click on “Submit and Get Final OTP.” An OTP will be sent to your registered mobile number. After entering the OTP, your registration process will be completed, and you will receive a Udyam Registration Number (URN).​ This certificate contains a QR code that links to your enterprise’s details on the Udyam portal.

Common Mistakes to Avoid

• Using the Aadhaar of a non-partner or unrelated person
• Mismatched PAN and GST details
• Incorrect classification of business activity
• Using a personal bank account instead of a business account
• Skipping annual updates when financial limits change

How can Chennai Filings help?

Registering under Udyam may seem simple, but errors can lead to rejection or missed benefits. Chennai Filings provides:

• Expert consultation on MSME eligibility
• End-to-end support for Udyam registration
• Document review and correction
• Access to additional MSME certifications (ZED, ISO, etc.)