Udyam Aadhaar: All you need to know about Udyam registration

Micro, small, and medium enterprise(MSME) is the backbone of the Indian economy. They contribute to a significant proportion of the country’s GDP and employment opportunities. The Government of India has introduced several schemes and initiatives, including the Udyam Aadhaar certificate, to boost the growth of MSME. One such initiative is Udyam Aadhaar, which aims to simplify the registration process of these enterprises.

What is Udyam registration?

Udyam Aadhaar is a unique registration mechanism for MSME introduced by the Ministry of Micro, Small and Medium Enterprises in 2020. The Udyam Aadhaar registration process is based on the concept of self-declaration, enabling MSMEs to register themselves for free and obtain the Udyam Aadhaar number. The registration process is entirely digital and takes only minutes to complete. Once completed, the MSME gets an Udyam registration certificate, which serves as a proof of registration.

Udyam registration certificate and its benefits

Upon successful registration, an MSME will receive an e-certificate – the Udyam registration certificate – which is valid for a lifetime. The Udyam Aadhaar certificate confirms the registration of the MSME and contains a unique identification number that helps them avail of several benefits provided by the government, including:

• Access to credit: An MSME with Udyam Aadhaar is eligible for collateral-free loans from banks and financial institutions, making it easier for them to access the necessary funds to grow.

• Access to government schemes, subsidies, and initiatives: Udyam registered enterprises can avail of various schemes, subsidies, and incentives offered by the government. These can help reduce operating costs and increase profitability. They also get special reservation policies in the manufacturing/ production sectors and can easily obtain registrations, licences, and approvals. This reduces the time and cost of compliance.

• Protection against delayed payment: Udyam Aadhaar registered enterprises can file a complaint against any delayed payments by their buyers, ensuring timely payments for their products or services.

• Priority in government procurement: With an Udyam Aadhaar certificate, MSME has a significant advantage over unregistered businesses when it comes to government procurement processes. They are eligible for a waiver of government security deposits (EMD) while participating in tenders. There are also direct tax law exemptions that reduce tax liabilities.

• Concession on electricity bills: Electricity bill concessions make it easier for MSME to manage their finances.

Eligibility criteria for Udyam Aadhaar registration

MSMEs wishing to qualify for Udyam Aadhaar registration must meet the following eligibility criteria:

• Type of enterprise: The enterprise should be a sole proprietorship, partnering firm, limited liability partnership, or any other legal entity. The enterprise must be a micro, small, or medium enterprise.

• Investment limits: There is a stringent criterion based on investment and turnover as the table below clearly outlines:

Additional read: Difference between Udyog Aadhaar and Udyam Aadhaar

Documents required for Udyam Aadhaar registration

The Udyam registration of MSMEs is entirely a paperless, online process, based on self-declaration. You need only the following documents and/ or details for Udyam registration online:

• Aadhaar number of the owner or authorised signatory of the enterprise

• PAN card of the enterprise

• GSTIN, if applicable

• Business address proof, such as electricity or telephone bills or property tax receipt

• Bank account details

How to register for Udyam Aadhaar certificate?

Udyam Aadhaar registration online is free of cost and permanent, meaning there is no need for Udyam Aadhaar re-registration. Follow this step-by-step process if you have a new enterprise not yet registered as an MSME:

1. Visit the official government Udyam registration portal at https://udyamregistration.gov.in/.
2. Click on ‘for new entrepreneurs who are not registered yet as MSME or those with EM-II’.
3. Enter the Aadhaar number and the name of the entrepreneur as per the Aadhaar Card. Click on ‘Validate & generate OTP’.
4. After validating, enter the necessary information about the enterprise.
5. Provide the bank account details of the enterprise, including bank account number and IFSC code.
6. Provide details on the main business activity of the enterprise, including its NIC code.
7. Confirm that the information provided is accurate and complete before clicking on ‘Submit’.
8. Check your registered e-mail address and mobile number for the generated Udyam registration number (URN).
9. Download the e-certificate or Udyam registration certificate from the Udyam registration portal using the URN.