An applicant can start a business with Udyog Aadhar portal, provided it is related to the manufacturing or service sector. The businesses must, however, conform to the stipulated investment and turnover threshold, in order to be eligible to be registered on the Udyog Aadhar platform.
Overview
Udyog Aadhar Business is a forum that enables the registration of businesses belonging to micro, small, and medium-sized (MSME) establishments. The registration of these establishments is governed by the Micro, Small, and Medium-sized Enterprises Development (MSMED) Act, 2006. The businesses intending to be referred to as MSMEs must get themselves registered on the Udyog Aadhar portal. The MSME, undoubtedly, is acting as the backbone of the Indian economy, as a result of their exemplary contribution to the country’s Gross Domestic Product (GDP). The key objectives with respect to the registration of the MSMEs on the Udyog Aadhar forum are:
- To enable the businesses belonging to the MSME sector to grow big enough to compete with international businesses
- Create better job opportunities through the MSME establishments thereby alleviating poverty and unemployment
- To make these industries, collectively utilize the government’s exclusive subsidies such as guarantee-free loans
- To safeguard the MSMEs from the harassment and undue influence exerted by big and well-established industries.
Genre of Business That Can Be Registered With Udyog Aadhar?
Although the perks promised for those businesses that register on the Udyog Aadhar are tempting, not every type of business can be registered. Only those establishments that can be classified as an MSME industry, based on the amount of their investment in the business, are eligible to register under Udyog Aadhar: https://uidai.gov.in/. Therefore, while a business can be started and registered on the Udyog Aadhar portal, it is mandatory that the respective businesses, whether belonging to the manufacturing or service sector, must strictly be an MSME establishment. The following table clearly points out the prerequisites for an MSMSE establishment. Only those industries can be registered on the Udyog Aadhar portal.
| Type of MSME | Investment in Plant and Machinery Manufacturing Industry | Investment in Service Industry |
| Micro Enterprise | Upto ₹25 lakhs | Upto ₹10lakhs |
| Small Enterprise | Upto ₹5 crores | Upto ₹2 crores |
| Medium Enterprise | Upto ₹10 crores | Upto ₹5 crores |
Thus, any business can be easily registered in the Udyog Aadhar portal, and the only prerequisite is that the business should belong to one of the categories elucidated in the table shown above. The business should either belong to the manufacturing sector or should belong to the service industry in order to be eligible for Udyog Aadhar registration.
Benefits of Udyog Aadhar Business Registration
Udyog Aadhar 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. The Udyog Aadhar registration process is simple and can be completed online through the Udyog Aadhar portal. Here are some of the benefits of obtaining Udyog Aadhar registration for your business:
- Easy access to government schemes: Udyog Aadhar registration helps MSMEs to access various government schemes and benefits such as subsidies, tax exemptions, and financial assistance for business expansion.
- Credit guarantee scheme: The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) is available for businesses that have obtained Udyog Aadhar registration. Under this scheme, collateral-free loans are provided to MSMEs to meet their working capital and investment requirements.
- Subsidies and incentives: The government offers various subsidies and incentives to MSMEs to promote their growth and development. Udyog Aadhar registration enables businesses to avail of these benefits easily.
- Protection against delayed payments: Businesses with Udyog Aadhar registration can file complaints against buyers who fail to make payments for the goods or services provided. The MSME Development Act protects MSMEs against delayed payments.
- Trade-related information: Udyog Aadhar registration provides access to various databases and information related to trade, industry, and investment. This information can be useful for businesses to make informed decisions and plan their growth strategies.
- Eligibility for government tenders: Many government departments and agencies prefer to award contracts to MSMEs with Udyog Aadhar registration. Therefore, obtaining Udyog Aadhar registration makes businesses eligible for government tenders and contracts.
Documents Required to Carry Out the Registration With Udyog Aadhar
The documents required to be furnished during the registration of an MSME depend on the type of corporate entity the MSME is incorporated into. For instance, if the MSME is a proprietorship firm, the applicant’s Aadhar card and personal details are to be furnished. In the case of a partnership firm, the Aadhar card of one of the partners may be used. In case, the MSME is being incorporated into a private company, the Aadhar details of the Director have to be submitted. If the MSME is an LLP (limited liability partnership firm), the Designated Partner’s Aadhar details are required. If the applicant does not possess an Aadhar card, the first step to be pursued would be to make an application and get hold of the Aadhar card.
It has to be kept in mind that the registration of a company in general and the registration of a company in Udyog Aadhar are completely different. While registering a company pertains to registering the business into a private limited company, LLP, or a partnership firm, the registration in Udyog Aadhar refers to the registration of small-scale businesses into micro, small, and medium-sized industries.
Regardless of the type of corporate entity, the following information has to be furnished along with the Udyog Aadhar application:
- Name of the MSME establishment
- The social category of the applicant
- Details of previous registration, if any
- Type of business
- Address of registered office
- Bank account details of the establishment
- National industrial classification code or (NIC) code
- District industry centre (DIC) total number of employees on the payroll of the respective MSME
- Activities of the business
- Email ID and mobile number of the applicant
- PAN (permanent account number)
- Total investment pitched in for the business.
Once all the details are filled in, the applicant has to submit the Udyog Aadhar application, after which the applicant is given an acknowledgment number with which the application can be tracked. The details thus given can be edited or updated if required by logging in to the official portal. It is pertinent to note that the Udyog Aadhar is now being migrated to the Udyam registration portal. By registering in Udyog Aadhar, the businesses will be eligible to receive the emoluments given by the government to the MSMEs. If you have any queries reach out to Vakilsearch.
FAQ’s
Udyog Aadhar is a registration provided by the Ministry of Micro, Small and Medium Enterprises (MSME) to small and medium-sized enterprises in India. Any business entity involved in manufacturing, processing, or preserving goods or providing services for more than a year can apply for Udyog Aadhar. The business should have a valid PAN card and Aadhar card.
There is no fee for obtaining Udyog Aadhar registration. The process is free of cost, and one can apply online through the Udyog Aadhar portal.
Udyog Aadhar registration is not mandatory for GST registration. However, businesses with a turnover of more than Rs. 40 lakhs (for goods) and Rs. 20 lakhs (for services) must register under GST.
The turnover limit for MSMEs is revised periodically by the government. As per the latest revision announced in July 2021, micro-enterprises with a turnover of up to Rs. 1 crore, small enterprises with a turnover of up to Rs. 10 crore, and medium-sized enterprises with a turnover of up to Rs. 50 crore are classified as MSMEs.
MSMEs are not taxed at a specific rate. The tax rate applicable to an MSME depends on the nature of the business, its turnover, and other factors. For example, a manufacturing company may have a different tax rate than a service-oriented one. The applicable tax rate is determined by the Income Tax Department based on the type of business activity and other relevant factors.
Udyam registration is the new process introduced by the government in 2020 to replace Udyog Aadhar. Udyam registration is a more comprehensive and detailed process that provides several benefits to MSMEs, such as access to credit and government schemes. Hence, Udyam registration is considered to be better than Udyog Aadhar. However, businesses that have already obtained Udyog Aadhar registration need not obtain Udyam registration immediately, as the government has allowed a transition period until 31 March 2022. Who is eligible for Udyog Aadhar?
What are Udyog Aadhar fees?
Is GST required for Udyog Aadhar?
What is the turnover limit for MSMEs?
What is the tax rate for MSME?
Which is better, Udyog Aadhar or Udyam registration?
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