Businesses like proprietary firms or firms operating in the MSME (Micro, Small, and Medium Enterprises) sector that need to bring legitimacy to their business or wish to avail of the government-sponsored subsidy schemes would require Udyog Aadhaar.
Udyog Aadhaar is a 12-digit identification number provided by the Ministry of MSME after the successful completion of the registration process. Udyog Aadhaar will simplify the registration process for micro, small, and medium enterprises.
The Udyog Aadhaar registration process is simple, quick, and free of cost. This blog post will explain the step-by-step Udyog Aadhaar registration process for you. Read on to learn more about the prerequisites for registration, the documents required, and so on.
Understanding Udyog Aadhaar
The Government of India launched the Udyog Aadhaar registration process to boost the MSME sector. Currently, the Udyog Aadhaar registration process has been migrated to Udyam Registration. Therefore, an MSME will have to apply for Udyam Registration to obtain the government benefits provided to the MSME sector.
Earlier, the MSME registration process involved a lot of paperwork. The Udyog Aadhaar Registration was introduced to simplify the MSME or SSI registration process. Industries registered with Udyog Aadhaar are entitled to receive the benefits of several government schemes such as subsidies, easy loan approvals, etc.
Entrepreneurs registered with Udyog Aadhaar need to migrate to Udyam Registration. Essentially, they need to re-register under the Udyam Portal to obtain the benefits provided to MSMEs.
Udyog Aadhaar eligibility
Udyog or Udyam Aadhaar is similar to individual Aadhaar, but is specifically meant for businesses. MSMEs and SMEs can avail themselves of subsidies as the main purpose of Udyog Aadhaar is to promote small businesses.
Companies, including sole proprietorship firms, partnership firms, HUFs, limited companies, production companies, LLP companies, and cooperative societies operating in India can apply for inclusion in the MSME category if they fulfill the criteria mentioned in the Micro Small and Medium Enterprises Act 2006.
The MSME eligibility criteria are as follows:
|Up to Rs. 1 crore
|Up to Rs. 5 crore
|Up to Rs. 10 crore
|Up to Rs. 50 crore
|Up to Rs. 50 crore
|Up to Rs. 250 crore
You can visit the official Udyam Registration website for the updated MSME eligibility criteria.
Udyog Aadhaar benefits
The benefits of Udyog Aadhaar or Udyam Aadhaar registration for MSMEs are as follows:
- It will be a permanent registration and basic identification number for an enterprise.
- MSME registration is paperless and based on self-declaration. The registration does not need renewal.
- Any number of activities including manufacturing or service or both may be specified or added in a single registration. Along with the Udyam Registration, enterprises may register themselves on GeM (Government e Portal (a portal to address issues relating to delays in payments), and simultaneously, MSMEs can also get enlisted on the TReDS Platform,(the invoices of receivables are traded on this platform) through three available platforms i.e.
- The Udyam Registration helps MSMEs avail the benefits of various government schemes such as the Credit Guarantee Scheme, Public Procurement Policy, additional edge in government tenders, and protection against delayed payments.
- Registration makes MSMEs eligible for priority sector lending from banks.
Udyog Aadhaar registration process
The Udyog Aadhaar registration process is simple and paperless; it is fully online and doesn’t require too many documents. The entire registration process has been simplified to facilitate the ease of doing business in India.
The registration process is simple. You will have to fill in the prompted data and follow the steps. For your ease, we have outlined the step-by-step process for you.
Step 1: Open the official website of the Udyog Aadhaar, now Udyam Aadhaar: https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm
Step 2: Fill in your personal details:
- First, fill in your name along with your 12-digit Aadhaar number.
- Select “Validate & Generate OTP.”
On your registered mobile number, you will get the OTP number. Once you enter the OTP number, you will get to select your social category. Select your social category from SC, OBC, ST, and General.
- It is to be noted that individuals who are filing for Udyog Aadhaar online need to have their Aadhaar number handy. If you do not have an Aadhaar card, you have to first get your Aadhaar card and then apply for Udyog Aadhaar.
Step 3: PAN card number
- The applicants are required to mention their PAN card number.
- In the case of proprietorship, enter the owner’s PAN number.
Step 4: Fill in the details about the company or companies you want to register.
- Here, you will have to fill in the name of the company or companies that are to be registered. If you have more than two companies, then separate Udyog Aadhaar is required for them.
- You would have to fill in the names of the companies in the Enterprise1 and Enterprise2 categories.
- You need to select the type of organization.
Step 5: You will have to fill in all the details about the company or companies such as
- Postal address
- Registered e-mail address
- Registered mobile number
Step 6: Fill in the date of commencement of the enterprise and all information regarding the registration of the company.
- This category includes information related to registration via SSI, EM1, or EM2 process.
Step 7: You will have to give the company bank details such as:
- Bank account number
- IFSC code
- Branch Name
Step 8: Classification of the Company
- You will have to mention the company’s core business, that is, whether the company is a manufacturing company or a service-providing company.
- The core business is to be mentioned. In case your company has multiple businesses, you need to choose the category where the company has a major presence.
- For example, if the company’s core process includes 70% of the manufacturing process and 30% of the service, you will select manufacturing as the core business.
Step 9: The total Investment in the company
- You will have to fill in the total number of employees
- The amount of investment made in lakhs in the company.
- If you have more than one company, then you would have to fill in details individually for each company that you are registering under this category.
Step 10: Choose the industry district center and finally accept the declaration.
- Choose the industry district from the list provided on the website, select the district center of the industry,
- Accept the declaration and click on the submit button.
- After the selection, you will get an acknowledgment number.
Importance of keeping Udyog Aadhaar updated
Updating the Udyog or Udyam Aadhaar certificate is crucial for small businesses in India to ensure they remain compliant with the latest government regulations and maintain their eligibility for benefits under the Udyam Registration scheme.
To update the Udyog certificate, businesses must log in to the Udyog registration portal using their Udyog or Udyam Registration Number (URN), and password.
Once logged in, businesses can update their Udyam certificate by making necessary changes to their business details such as:
- Increased or decreased turnover
- Change in employment count
- Change in investment ticket size
- Business address change, etc.
After making the changes, businesses can download the updated Udyam certificate with the revised details. It’s important to note that the updated Udyam certificate must be obtained within the specified timeline as per the government regulations to avoid any penalties.
In conclusion, updating the Udyam certificate online is a simple and important process that small businesses must adhere to maintain their compliance and benefits under the Udyam Registration scheme.
Udyog Aadhaar and GST Registration
Udyog Aadhaar and GST registration are closely integrated. Previously, only the Aadhaar number was required for Udyog Aadhaar registration, but having a PAN & GST number has been made mandatory from 01.04.2021. This is because PAN- and GST-linked details on investment and turnover of enterprises will be taken automatically from government databases. The Udyog Aadhaar online system is fully integrated with Income Tax and GSTIN systems.
Udyog Aadhaar provides major benefits to companies falling under the MSME category, boosting these firms to compete and grow in the competitive world.
The main motive of the government to introduce such a scheme is the overall growth of the economy and the development of all categories/sectors of industries across India. This blog post should help you fully understand the Udyog or Udyam Aadhaar registration process.
Is Udyog Aadhaar registration free?
There is no fee for filing Udyam Registration. However, Aadhaar number is required for Udyam Registration. The Aadhaar number shall be of the proprietor in the case of a proprietorship firm, of the managing partner in the case of a partnership firm, and of the karta in the case of a Hindu Undivided Family (HUF).
What is Udyog Aadhaar for startup?
Udyog Aadhaar is a registration provided by the Ministry of Micro, Small, and Medium Enterprises (MSME) to small and medium-sized enterprises in India. It is a 12-digit unique identification number that serves as proof of registration for the business entity.
What are the benefits of Udyog Aadhaar?
You can avail loans at a lower interest rate. For patent registration, a 50% grant is available. Reimbursement of ISO certification. Makes the process of availing licenses, approvals, and other registrations easy.
Is GST mandatory for Udyog Aadhaar registration?
According to the information provided on the website of the Ministry of Micro, Small & Medium Enterprises, one should have PAN and GST numbers mandatorily for MSME registration from 01-04-2021.
What is the tax rate for MSMEs?
MSME companies, which come under section 115BA of the Income Tax Act, are eligible for a tax rate of 25% instead of the usual 30%. With a turnover of up to ₹400 crore as one of the criteria, it includes the MSME sector exclusively. Specified deductions, set-offs, and carry-forwards are not allowed.