What is Udyog Aadhaar: Registration Process, Eligibility & Benefits

Udyog Aadhaar is an administrative reform based on the concept of Unique Identification launched by the Ministry of Micro, Small and Medium Enterprises, Government of India, to fulfil the dreams of the country's dynamic MSME sector.

It is a 12-digit identification number known as a Unique Identification Number (UIN), also called an Aadhaar for entrepreneurs. It will bring the single identity number for micro, small, and medium-scale enterprises (MSMEs). This simplification of registration is convenient and effectively enables easy access to Government Schemes, benefits, and incentives designed to develop the MSME Sector.

Keep reading to know all the benefits of the Udyog Aadhaar Certificate and how to register.

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What is Udyog Aadhaar?
Eligibility For Udyog Aadhaar
Registration Process
Udyog Aadhaar Memorandum (UAM)
Documents Required
Is it Helpful for Small Businesses?
Benefits of Registration
Frequently Asked Questions

What is Udyog Aadhaar?

Udyog Aadhaar is one of the revolutionary concepts that has revolutionised the identification and registration of micro, small, and medium enterprises (MSMEs) in India. Started by the Ministry of Micro, Small, and Medium Enterprises (MSME), it provides a 12-digit unique identification number (UIN) for these businesses.

In September 2015, Udyog Aadhaar was established in place of the SSI registration system, though the procedure became more simplified and easy. This integrated system works mainly as a single point of access through which MSMEs can access various government policies, incentives, and initiatives for their growth and prosperity.

What is the Aim of Udyog Aadhaar?

Udyog Aadhaar is a new open enrollment government program introduced to help India's micro, small, and medium enterprises (MSMEs). Its primary objectives are:

Simplified Registration: Ensure a comprehensive, web-based registration and issuance of unique identity numbers for MSMEs.
Access to Benefits: Registered businesses should be able to access various government incentives, promotions, and support services.
Promote Growth: Promote and offer incentives for the growth and diversification of small enterprises in various industries.
Digital Empowerment: Promote the assimilation of MSMEs into the digital market and the official commerce circle.
Data Collection: Establish lists of all MSMEs that can be used in policy-making and the formulation of focused interventions.

What is the Eligibility for Udyog Aadhaar?

Udyog Aadhaar registration can be applied by enterprises as defined under the Micro Small Medium Enterprises Act under the Ministry of Micro, Small and Medium Enterprises. The criteria are formulated based on the investment in plant and machinery in the manufacturing industries and equipment in the service industries.

Here's a table that outlines the specific investment thresholds for each category:

Enterprise	Investment	Turnover
Micro	₹1 crore	₹5 crore
Small	₹10 crore	₹50 crore
Medium	₹50 crore	₹250 crore

However, these investment limits might change occasionally depending on government policies. So, to avoid violating government policies, a business must ensure that it undertakes its investments within the current set of policies.

What is the Registration Process of Udyog Aadhaar?

Registering for Udyog Aadhaar is a straightforward process that can be accomplished by following these simple steps:

Step 1: Go to the official website of Udyog Aadhaar.

Step 2: Provide the Aadhaar number and name in this format as recorded on the Aadhaar card.

Step 3: Check and verify the details, and then an OTP will be generated.

Step 4: Please input the One-time Password received on the phone number registered with you.

Step 5: Provide compulsory details, including the business name, the type of business entity, the PAN details, and the physical business location.

Step 6: Ensure that you include the date on which the business commenced operation, whether it has been registered before, and employment data.

Step 7: Input correct business figures such as the nature of the business, its NIC code number, investment, & DIC particulars.

Step 8: Provide the bank account details, like the IFSC code.

Step 9: Read the declaration, go through it and accept it.

Step 10: Apply for the loan, and once the application is approved, get an OTP to proceed.

Step 11: After the OTP, enter the captcha code.

Step 12: At the end of the process, an acknowledgement or reference number will be forwarded to your registered email for future use.

What is the Udyog Aadhaar Memorandum (UAM)?

Udyog Aadhaar Memorandum (UAM) is one of the primary principalities of the Ministry of MSME, and it will streamline the registration process for Micro, Small, and Medium Enterprises (MSMEs). Launched in 2015, the UAM is a simplified one-page registration document that enables the MSME to provide the basic details of its existence, its bank details, the Aadhaar card details of the promoter/owner, and other related details.

Of course, one of the primary benefits, named for the UAM, is free registration. Therefore, there are no registration costs. To be eligible for UAM registration, an enterprise must meet the following conditions:

It should be either a sole trader, a partnership firm, a Hindu undivided family business or a private limited company.
Engage in activities provided under activities reserved to industries by the Government of India for MSMEs.
Ensure the investments and the turnover required to classify them as an MSME are met.

However, it must be pointed out that there is no restriction regarding the number of UAMs that can be filed using a single Aadhaar number, which provides the necessary flexibility for different sorts of businesses.

Documents Required to Register for Udyog Aadhaar

To obtain the Udyog Aadhaar, the applicant must complete and attach a list of documents and forms to ensure the authenticity and accuracy of the information provided. Here's a concise overview of the key documents required:

Aadhaar Number: In the case of an entity that is only a sole proprietor, managing partner, or an authorised representative for the entity type, the Aadhaar number of the sole proprietor, managing partner, or an authorised representative.
Permanent Account Number (PAN): The PAN card issued by the Department of Income Tax provides proof of identification to the business entity.
Goods and Services Tax Identification Number (GSTIN): If applicable, enterprises registered under the GST system must provide a necessary GSTIN.
Bank Details: A mix of the details of the business bank account that includes the IFSC code of the bank branch in which the said account is being kept.
Address Proof: Receipts of property tax returns, utility bills, or rent agreements that locate the business and its operations in a particular place.
Business Particulars: Information regarding the business's activities, such as the date it started, its legal status in the country, such as proprietorship, partnership, and so on, and the type of business it primarily handles.
Ownership Information: Elaborate information about the persons behind the business, owners or promoters and their positions.
Employment Data: The data about the headcount of the labour force personnel of the enterprise in question.

How is Udyog Aadhar Helpful for Small Businesses?

Udyog Aadhaar is very helpful, especially for small businesses, in the following ways:

1. Easy Registration Process:

Udyam Registration is a portal for registering a business without many formalities. It does not involve much paperwork and can be done quickly, compared to the other methods preferred by entrepreneurs, which can take much of their time.

2. Access to Government Schemes:

Businesses that register as MSMEs become eligible to access numerous government programs unique to the MSME sector. This leads to the availability of specific courses for privileged support, skill enhancement activities, technology advancement support, and market access opportunities among organisations.

3. Financial Benefits:

The globalisation of stock markets has led to enhancing credit facilities for Udyam-registered enterprises. Such enterprises obtain collateral-free loans and comparatively lower interest rates from banks to reduce their ailments and foster growth.

4. Tax Advantages:

MSMEs that register under the Udyam program get access to several tax exemptions. These may be in the form of complete exclusion from some direct taxes, for instance, in the first few years or tax reliefs for some specific categories of MSMEs to make them more financially capable.

5. Subsidy Access:

Registration allows businesses to access many subsidy programs that would have been unavailable. These can include aspects like patent registration and quality certifications, among other costs incurred in adopting technology that can burden small enterprises.

6. Tender Participation:

It also enables small businessmen to register their enterprises under Udyam Registration and offers them a chance for government tenders and procurement. Most tenders have special requirements for what are referred to as MSMEs, making it easier for such enterprises to get government business.

7. Marketing and Promotion Support:

Marketing is another area that should attract the attention of registered businesses since they can use state-supported platforms for advertising. This comprises selling through trade fairs, trade shows, and e-commerce platforms to extend the market access of small enterprises by minimising costs.

Benefits of Udyog Aadhaar Registration

There are several advantages of Udyog Aadhaar registration. Let’s discuss a few of them:

Soft credit facilities, such as loans with no collateral and loans at lower interest rates, are also preferentially extended to the government.
Subsidy support to engage in international trade fairs and exhibitions to boost and gain more market access internationally.
Access to certain exclusive governmental subsidies and incentives given only to MSMEs.
Improved the functionality of micro-business loans and other programs dedicated to other sectors.
Provisions relating to imposition of interest at the compound rate in case payments are not made on larger enterprises, protecting the cash flow.
Subsidised power and water tariffs have lowered the cost of providing these utilities.
The need for business bank accounts and other financial services was made easier to access.
Subsidies for bar-code registration will trigger industry players to standardise their products to be easily traceable.
Easy availability of policy related to the particular sector and amendment to schemes meant for manufacturing and production units.
The advantage of ’octroi (local entry tax)’ under different incentive policies helps reduce the chance of extensive logistics costs.

Udyog Aadhaar, or Udyam Registration, is a revolution for India's Micro, Small and Medium Enterprises. Through providing loans and subsidies, access to global markets, and many others, the Udyog Aadhaar contributes to enabling the growth of MSMEs and taking up their rightful place for developing the nation’s economy.

The registration process has remained smooth and idiomatic for businesses as they are giving way to a vastly enhanced and active MSME sector in the nation.

FAQs about Udyog Aadhaar Registration

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Where can I register for MSME Udhyog Aadhar?

To register for MSME Udhyog Aadhar, you can access the official website of the Ministry of MSME.

What is the meaning of MSME?

This is an acronym and stands for Micro and Small Medium Enterprises.

On which date was MSME Udhyog Aadhar launched?

The MSME Udhyog Aadhar was officially initiated in September 2015 under the MSMED Act of 2006 to support micro, small and medium enterprises.

Is the registration of Aadhar Udhyog free of cost?

Yes, the Aadhar Udhyog Registration facility is available free of cost.

To whom is Udyog Aadhaar beneficial?

In India, micro, small, and medium enterprises (MSME) can register under the Udyog Aadhaar Memorandum (UAM). The business can be run by a sole trader, in partnership, under Hindu Undivided Family, or a Private Limited Company.

Who gives Udyam a certificate?

The MSME Ministry verifies, and the Udyam registration certificate is issued to all business entities under the MSME division. The Ministry of MSME does not issue a physical certificate. They give an e-certificate after registering the MSME business.

Does one need a bank account to register Udyam?

All the MSMEs can register through the Udyam Portal for Udyam registration without any restrictions regarding their size or turnover. The business should have a valid Aadhar number and bank account as the main requirements for getting instant approval for a business loan.

For how long is the Udyam certificate valid?

Udyam certificate is specially framed to ensure the lifetime validity of the particular business entity. Once you have registered with the Udayam with an Aadhar, you can use it for your entire lifetime.

Is Udyog Aadhaar free of cost?

Yes, filing for Udyog Aadhaar registration is free of cost.

Who is not eligible for Udyam registration?

An individual cannot apply for Udyam MSME registration, i.e., MSME eligibility is only for business entities. Any business with an annual turnover of over ₹250 crores is not eligible for MSME registration as it exceeds the MSME turnover limit.

Is GST compulsory for Udyog Aadhar?

For companies or entities exempt from GST registration requirements, the GST number is not required for the MSME registration process. Nonetheless, organisations or enterprises with an annual revenue of over ₹40 lakhs are considered taxable entities.

When does Udyam expire?

The Udyam certificate is good for eternity. You can use Udyam registration for as long as you live once you've applied using your Aadhar.

Is it possible to open a new bank account with Udyog Aadhar?

You can use Udyog Aadhar to open a new bank account. It is also used as a business registration certificate for MSMEs.

When was Udyog Aadhar launched?

Udyog Aadhar was launched on 18 September 2015.

Is it possible to get a physical copy of Udyog Aadhar certificate?

It is not possible to get a physical copy of the Udyog certificate as the ministry doesn’t provide it.