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Tata Capital > Blog > Loan for Business > How to Cancel Your MSME (Udyam) Registration Online

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How to Cancel Your MSME (Udyam) Registration Online

How to Cancel Your MSME (Udyam) Registration Online

When introduced, MSMEs (or Micro, Small, and Medium Enterprises) were a game-changer for countless Indians. They continue to contribute to the growth and development of the economy and play a central role in people’s lives.

In 2020, the Government of India introduced the Udyam portal to replace the UAM registration system. Its aim was to make the online process of registering as MSMEs easier for businesses. This was monumental for many companies, allowing easy credit access, participation in government tenders, tax benefits, sponsorship programs, and more.

However, there may be certain circumstances under which you are required to cancel your MSME license online. In this article, we will delve into how to cancel MSME registration, what reasons may contribute to cancellation, and the conditions required to cancel it.

Step-by-Step MSME Cancellation Process (2026)

The process of cancelling your MSME license is quick and uncomplicated and can be done entirely online.  Online cancellation is designed to be user-friendly. 

Here are the steps for how to cancel MSME registration: 

1. Access the Udyam portal

First, access the Udyam portal. Once you have reached the Udyam Registration page, find the option for “Update/Cancel Registration”. 

2. Login

Log in to your Udyam Registration account using your registered mobile number. Enter the Udyam Registration Number and the registered mobile number to access your account. During this step, you will receive a one-time password (OTP) verification via SMS or email. Verify your identity and proceed.

3. Navigate to cancellation

After successfully logging in, find and click the “Cancellation” option, which is usually located at the top right corner of the page.

4. Select the reason for cancellation

After clicking “Cancellation,” you will have to choose the reason for your cancellation from the dropdown menu. Depending on the reason you choose, you may be required to provide additional details in the text box. During this step, it is essential to be precise, choose the right option, and provide concise information.

5. Submit your request and await confirmation

After ensuring you have filled in all the correct information, click on the button that says “Cancel My Udyam”. This will officially submit your request, which will be acknowledged by the system immediately. A formal notice of confirmation will be sent within a few hours and is subject to approval.

Also, read – Msme Sector: List of Eligible Businesses


Documents Required for MSME Cancellation

Before beginning the cancellation process, it is essential to keep all your documents handy. These include your Udyam Registration Certificate, PAN card, Adhaar card, the bank details of the associated account, any relevant documents (for example, merger documents, closure documents, and more), GST registration, ITRs for the last financial year, and a self-declaration outlining the reason for cancellation.

When cancelling your MSME registration license, you will also need to cancel your Udyog Aadhaar Certificate. This is an identification number that is issued to MSMEs and is commonly known as an Aadhaar for business. To begin the process of cancelling your Udyog Aadhaar, you must possess an active Udyog Aadhaar registration, have a reliable internet connection and device, and have updated contact information.

You must also ensure that your business is up to date on all MSME compliance-related issues, like filing necessary returns or paying outstanding fees. A clear and valid reason for cancelling your Udyam license is also required.

Also, read – Top Government Schemes for Startups & MSMEs in India (2026)


Top Reasons to Cancel Your MSME Registration

There may be several circumstances under which you will need to cancel your MSME license registration. 

These could include:

1. Closure of business

Businesses must cancel their MSME licenses after they cease operations to avoid legal issues. This can also help resolve business-related matters and prevent the registration from being misused.

2. Shift in focus

Companies that choose to expand and develop into industries outside of the MSME parameters may be required to cancel their registration. This can help them find support systems better suited to their new endeavours.

3. Structural changes

Any changes in your business’s structure, such as mergers, ownership changes, and acquisitions, could require you to cancel your existing MSME registration. However, it can be re-registered with the updated details. This step ensures that the MSME license and status reflect the correct organisational ownership and structure.

4. Scaling beyond the MSME criteria

Businesses that grow beyond the scope of the MSME criteria may be required to cancel their registrations. This is done to maintain regulatory compliance. Additionally, larger companies require different support mechanisms.

Also, read – Get MSME Loan Without Collateral in 5 Ways


Key Points Before Cancelling MSME

The cancellation process for your Udyam registration can seem tedious. However, some steps can streamline it and make it easier. This includes keeping all necessary documents ready and ensuring all compliance and finance-related requirements are fulfilled. Additionally, the Udyam registration cancellation time can be a bit long. It is important to be patient and not submit multiple requests.


Udyam Registration Cancellation Time & Confirmation

Udyam registration cancellation time depends on why you are cancelling and the documents you submit. After applying on the Udyam Portal, avoid sending repeated requests. Before cancellation, clear all dues, taxes, and legal responsibilities linked to your business.

Once the request is submitted, you will receive an instant acknowledgement on the portal. In most cases, a confirmation is issued within 1–2 hours, provided the details are correct and approved by authorities. Delays may happen if verification is needed or if information is incomplete.

Also, read – What is Market Development Assistance (MDA) Scheme?

Cancelling MSME After Business Closure

If your business has permanently closed, cancelling the MSME (Udyam) registration is the right step. An active registration is only meant for operating businesses. Keeping it after closure can cause confusion or misuse of your business details.

There is no penalty for cancelling MSME registration once operations stop. The process simply updates government records and shows that the enterprise is no longer active. After cancellation, you must not use MSME benefits, mention MSME status on invoices, or apply for related schemes.

If you plan to restart the business later, you can apply for a fresh Udyam registration.

Also, read – NIC Code for MSME:Guide on National Industrial Classification

Updating MSME vs Full Cancellation

Updating MSME details and cancelling MSME registration serve different purposes. Updating is useful when your business is active, but details change, such as address, activity, turnover, or bank information. It keeps your Udyam record accurate and valid.

Full cancellation is needed when the business has permanently closed or no longer operates. Once cancelled, you cannot use MSME benefits, schemes, or mention MSME status on invoices. If your business is running, updating is the right choice. Cancellation should be done only when operations stop completely.

Conclusion

MSMEs and the Udyam Registration system have had an extremely crucial role in supporting the growth of small, micro, and medium-level enterprises across the country. These have served as backbones of society, providing vital products and services in cities and towns all over India. The government was committed to supporting and investing in small businesses, and the portal was designed to be user-friendly and quick to encourage business owners to use it.

However, if you need to cancel Udyam registration for any reason, the cancellation process is also streamlined and easy to follow. Understanding how to cancel Udyam registration and following a checklist can also make the process much easier. It is also important to note that the portal will be accessible for future registrations even if you cancel your existing one. 

If you are looking to start your own small business, business loans can help you obtain the funds you require. Tata Capital’s MSME loans offer you large loan amounts, flexible tenures, attractive interest rates, and multiple EMI options. Additionally, Tata Capital provides MSME loans without the need for any collateral and with easy eligibility criteria.

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FAQs

Is Udyam registration cancellation mandatory for businesses that no longer qualify as MSMEs?

You don't need to cancel your Udyam registration unless you want to update your business status. However, it's better to cancel it if your business no longer meets the MSME criteria.

How much does it cost to cancel a Udyam registration online?

You can cancel your Udyam registration online at no cost. The process is free and only takes a few minutes through the official Udyam portal.

If I cancel my Udyam registration, can I re-register in the future if my business circumstances change?

Yes, you can apply for a new Udyam registration if your business again meets MSME eligibility requirements. Just use your Aadhaar and business details to register on the Udyam portal.

Is there any fee for cancelling MSME registration online?

 

No, MSME or Udyam registration cancellation is completely free. The government does not charge any fee for submitting a cancellation request online.

How long does MSME cancellation take after submission?

 

MSME cancellation usually takes a few hours to a few working days, depending on verification and approval by the Udyam portal authorities.

Can I reapply for MSME after cancellation?

 

Yes, you can reapply for MSME registration anytime if you start a new business or restart operations, as long as you meet eligibility criteria.

What if my MSME cancellation request is rejected?

 

If rejected, you can correct the details, upload proper information, and submit a fresh cancellation request through the Udyam portal.

Do I need to submit physical documents for MSME cancellation?

 

No, MSME cancellation is fully online. You do not need to submit any physical documents or visit any government office.

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