Growing Your Business? Here’s How to Upgrade from Micro to Small in Udyam

As your business expands, so do your compliance responsibilities. If you’re registered under the Udyam Registration Portal as a Micro Enterprise and your investment or turnover has grown, it’s crucial to upgrade your status to Small Enterprise.

But how do you upgrade your classification in Udyam?

This blog explains the process, eligibility criteria, compliance obligations, and frequently asked questions so you can grow without risking your MSME benefits or legal standing.

Why MSME Classification Matters

Under the Micro, Small, and Medium Enterprises Development (MSMED) Act, your classification directly determines:

• Your eligibility for schemes like CGTMSE, interest subsidies, and priority lending
• The kind of tenders you can apply for
• Compliance requirements and loan limits

Misclassification may lead to disqualification from benefits, penalties, or loan rejection.

MSME Classification (As Per 2020 Notification)

Udyam uses both investment in plant & machinery and annual turnover to classify enterprises:

So, if your figures now exceed Micro thresholds, it's time to upgrade to Small.

Is Upgrading in Udyam Mandatory?

Yes — Udyam registration is dynamic.

The system automatically reclassifies businesses based on PAN and GST data. But to stay compliant and accurate, it is your responsibility to update your Udyam profile when:

• Your investment or turnover increases
• You add new business activities
• You undergo a structural or ownership change

How to Upgrade from Micro to Small in Udyam Registration

Upgrading your Udyam classification is done through a simple online process.

Step-by-Step Guide:

1. Visit the Official Udyam Portal

Go to https://udyamregistration.gov.in 

2. Click on “Update Udyam Registration”

Use the link titled “Update Details” from the homepage menu.

3. Enter Your Udyam Registration Number (URN)

Verify with the OTP sent to your registered mobile number or email ID.

4. Edit Investment & Turnover Details

Update your current:

• Plant & machinery investment
• Annual turnover

These figures should match your latest ITR and GST returns.

5. Submit & Generate Updated Certificate

Once submitted, the system will recalculate your classification and issue a new Udyam Certificate with “Small Enterprise” status.

How Is Classification Verified?

Udyam Registration pulls financial data from:

• Income Tax portal for investment details
• GST portal for turnover figures

Your classification is auto-updated each year based on actual filings. Falsifying data may result in:

• Suspension or cancellation of Udyam status
• Ineligibility for MSME schemes
• Penalties or legal action

Benefits of Upgrading from Micro to Small Enterprise

• Higher Loan Limits

Access bigger credit lines under government and private lending schemes

• Eligibility for Advanced Subsidies

Avail support under Credit Linked Capital Subsidy Scheme (CLCSS), ZED, and more

• Increased Tender Participation

Apply for government and PSU tenders with higher value eligibility

• More Investor Confidence

Investors and banks often prefer Small over Micro for larger ticket sizes

• Better Market Access

International trade and B2B opportunities grow as you move up the MSME ladder

Final Thoughts

As your business grows, staying compliant is just as important as scaling operations. Upgrading from Micro to Small Enterprise on the Udyam portal is not just legal, it’s mandatory once you cross the thresholds.

Make sure your financials, Udyam details, and government filings align. A simple update today can save you from bigger issues down the line and help you access bigger opportunities.

Need Help with Udyam Upgradation?

We help MSMEs:

• Update Udyam classifications
• Resolve PAN/GST-related errors
• Retrieve and reissue updated Udyam Certificates