The Government of India, with the aim to boost small scale businesses in the country, introduced the Udyog Aadhar. Udyog Aadhaar, which is also referred to as MSME registration, is a twelve digit unique identification number issued by the Ministry of Micro, Small and Medium Enterprises (MSME) to all the businesses that register themselves as micro, small or medium sized. Similar to how individuals are issued an Aadhar card with their unique identification number on it, micro, small and medium-sized businesses are issued a certificate with their registration number on it.
Earlier the procedure to register as a small enterprise was bureaucratic with many documents (and with eleven forms to be filled) and the entire process was time-consuming and tedious. Also, there was no one place to carry out registration as some businesses opted for a national level portal of the Entrepreneur Memorandum (EM) to register themselves while certain States had their own portals for carrying out the registration. This made the entire process heterogeneous and confusing for businesses that wished to register themselves as small and medium enterprises.
The Government, in order to encourage small scale industries and enterprises, introduced the Udyog Aadhaar registration process, which is a comparatively simple procedure that did away with all the paperwork and is a uniform procedure that is carried out online. The present registration form is referred to as Udyog Aadhaar Memorandum where the MSME certifies its existence. This Memorandum provides mandatory information which includes the Aadhaar details of the owner or individual who is filing the form along with bank account details, investment in plant and machinery or equipment, etc.
Further with to the Udyog Aadhaar certification for small, medium and micro enterprises, the Government can easily provide various benefits to these micro, small and medium businesses, some of which include lower rates of interest on loans, fast loan approvals, certain waivers on loans, funding from banks on priority sector lending, various subsidies and exemptions, priorities to get orders from public sector units and government departments and preferences for Government schemes and services or for participation in trade fairs and expos, among other benefits.
Points to remember before registration of the Udyog Aadhar for your business
- It is for existing businesses only.
- Udyog Aadhar is for manufacturing and service sector businesses only.
- Udyog Aadhaar is for every type of business including proprietorship, one-person company, partnership firm, production company, limited company, private limited company, limited liability partnership, co-operative societies or any association of persons or any other undertaking.
- In the case of LLP or partnership firm, any one partner authorized by the firm can apply for MSME registration.
- In the case of sole proprietorship, only the sole proprietor can apply for the MSME registration.
- In the case of a company, the representative of the company as authorized by the Board of Directors of the company can apply for MSME registration.
- A business entity has to ensure that it meets a set of criteria needed to classify a business as a small, medium or micro enterprise before considering to apply for Udyog Aadhaar.
- For checking the eligibility a company can check the criteria mentioned in the MSMED Act, 2006 for classification as a medium, small or micro enterprise.
- There is no registration charge or filing fee while applying for Udyog Aadhar and the entire process is free of cost.
- The registration process is online, easy to understand and a fast process.
- The information sought for registration of Udyog Aadhar is on self-certification basis and no supporting documents are required at the time of online registration, including the certificates asked to be provided can be self-certified.
- Udyog Aadhar Memorandum or UAM can be filed by self-declaration of the details of the enterprise.
- Under the Udyog Aadhar scheme, more than one Udyog Aadhaar registrations for different businesses can be filed with the same Aadhaar number.
- If a business owner wishes to apply for more than one Udyog Aadhaar certification for different businesses, then they can opt for individual registration.
- Instant registration is obtained once the form for Udyog Aadhaar is filled and uploaded by way of registration number on the email address provided while filling the form.
Having an Udyog Aadhaar registration is definitely beneficial for businesses as they get information regarding various services provided the Ministry and Government for MSMEs and can even apply for the same. If business owners have any doubts regarding the features or applicability for the registration or the application process, details of the Udyog Aadhaar registration process on the deAsra checklist can probably help solve some of their queries.