What is Udyog Aadhaar?
Udyog Aadhaar is a 12-digit registration number issued by the Ministry of Micro, Small and Medium Enterprises (MSME) to the existing or new small and medium enterprises in the country who have applied for registration. This initiative of having the one-page Udyog Aadhaar Memorandum (UAM) has come into effect on 18th September 2015. It has simplified the erstwhile lengthy procedure of filing for MSME registration where the small and medium enterprises had to fill Entrepreneur Memorandum –I (EM-I) and Entrepreneur Memorandum –II (EM-II) forms which in turn consisted of almost 11 different forms along with the necessary attested certificates.
The introduction of such an online user-friendly form has definitely reduced the time is taken and efforts made in the entire process of applying and verification of the documents for the MSME registration. The Micro, Small and Medium Enterprises Development (MSMED) Act was notified in 2006 to address policy issues affecting MSMEs as well as the coverage and investment ceiling of the sector. As per MSME Act of 2006, all enterprises are expected to register with District Industries Centre (DIC) of their area and file Entrepreneurs Memorandum (EM) 1 for intention to start a business if manufacturing or service and file EM 2 after starting production. Udyog Aadhar is just like an ID proof for small enterprises…. in a way it is no different than having a PAN card or Aadhar card.
The registration can serve as an identity proof of your company while opening a bank account or applying for VAT registration. If you are claiming any benefit from central or state government under a scheme (for small-scale industries), then you would need the Udyog Aadhar Identification number. The Udyog Aadhar certification alone does not entitle you to any benefits, but this is the minimum required if
you want to apply for any small-scale industry related incentives.
Reasons to register a Udyog Aadhaar registration
Prior to October 2016, to get yourself registered as MSME’s one needs to carry out a lot of paperwork and fill Employment Memorandum I and II. However, Kamath Committee on Financial Structure of MSME sector recommended a single window clearance system The government of India announces various incentives time to time to promote MSME’s through MSMED Act 2006. For which you require registration which
is provided by Udyog Aadhar.
Moreover, as per Trademark Rules 2017, special provision has been carved out for micro and small industries. As per schedule A of the rules, the fees for filing
a trademark application for MSME’s is only 50% as compared to another form of business.
Why do I need Udyog Aadhaar registration?
Having Udyog Aadhar is not mandatory still it is advisable for the units/enterprises to have it as It will enable the units/enterprises to seek information and apply online about various services being offered by all
Ministries and Departments. Earlier only medium enterprises were insisted to file EM2 as it was very cumbersome to file, the simplified Udyog Aadhaar will enable all enterprises to file and register themselves so that simply by using Udyog Aadhaar Number, they can access other services. The process of
obtaining Udyog Aadhaar Number is free-of-cost, paper-less and results in instant registration.
Process for Udyog Aadhaar registration in India
The online Udyog Aadhar registration process has been created with an aim to encourage the online filing of Entrepreneurs Memorandum for Micro, Small and Medium Enterprises. The online Udyog Aadhar registration process will simplify the registration process. In the registration form, the MSME will self-certify its existence, bank account, business activity details, employment and ownership details and other information.
For the registration process of small and medium scale industry, we need to follow step by step the procedure as stated below:-
- For registration, the owner can follow two modes of filling the single form being an online as well as offline.
- If you want to register more than one industry then can do it by filing individual registration.
- For the registration, you need to fill the single form which is also available at the website, http://udyogaadhaar.gov.in/UA/UAM_Registration.aspx
- The document which is required for initiation of the registration is the Personal Aadhar number then the name of the enterprise followed by Address, bank account details.
- After submission of form, you will get the registration number.
- You don’t need to pay any registration fees for this process.
Documents and Information Required for Online Udyog Aadhaar Registration
1. Aadhaar Number–
12 digit Aadhaar number issued to the applicant.
2. Name of Owner–
The applicant name as mentioned on the Aadhaar Card issued by UIDAI.
3. Social Category –
Applicants Caste: General / Scheduled Caste / Scheduled Tribe / Other Backward Castes. Attach the proof of SC/ ST/ OBC certificate.
4. Name of Enterprise–
Name of the legal entity to conduct business. One applicant can have more than one enterprises doing business and each one can be registered for a separate Udyog Aadhaar and with the same Aadhaar Number.
5. Type of Organization–
Type of Business Entity or Legal Entity. Proprietorship Partnership Firm Hindu Undivided Family Private Limited Company Co-Operative Public Limited Company Self Help Group Others (Limited Liability Partnership)
6. Postal Address–
Address of the business including mobile and email address.
7. Date of Commencement–
Business inauguration date.
8. Previous Registration Details–
Details of previous MSME registration, if applicable.
9. Bank Details–
Details of the bank account of the company including IFSC Code and Bank Account number.
10. Major Activity–
The major area of activity of the business manufacturing or service.
11. NIC Code–
The appropriate NIC Code should be entered from the National Industrial Classification (NIC) handbook.
12. Person employed–
The total number of people employed in the business.
13. Investment in Plant & Machinery / Equipment–
Amount of money invested in terms of machinery and equipment by the business.
14. DIC–
Details of the District Industry Centre nearest to the business, if required.
Advantages & Benefits of Udyog Aadhaar registration
The benefits are:-
- Eligible for the government scheme regarding the funding like
a) Without Guarantee Loan
b) Easy Loan
c) Low Interested Rate Loan - You will get the financial support from the government to the participate in the foreign expo.
- You will get the various government subsidies
- Credit prescription (Priority sector lending)
- differential rates of interest etc
- Excise Exemption Scheme
- The exemption under Direct Tax Laws.
- Statutory support such as reservation and the Interest on Delayed Payments Act.
- States/UTs have their own package of facilities and incentives for small scale. They relate to the development of industrial estates, tax subsidies, power tariff subsidies, capital investment subsidies and other support.
- Both the Centre and the State, whether under law or otherwise, target their incentives and support packages generally to units registered with them.
FAQ, related Udyog Aadhaar registration
Q.1 Whether it is compulsory for a person to have a registration for his enterprise?
A Medium enterprise engaged in the manufacture or production of goods has to compulsorily register under the MSMED Act. For other Enterprises, the registration is discretionary or optional.
Q.2 What is MSME registration?
MSME registration is the procedure to get your firm register under MSME development Act for SME benefits.
Q.3 Who can apply for MSME Registration?
Any person, having valid Aadhaar Number, can apply for MSME Registration Online.
Q.4 Is there any difference between MSME, SSI & Udyog Aadhar?
No.
Q.5 How much time does it take to get SSI/MSME Registration?
typically within 1 working day.
Q.6 How to select NIC Code of the Activity performed by the enterprise?
NIC code can be selected once the aadhar number is validated and major activity (manufacturing or service) is selected. In order to simplify the selection of appropriate NIC code, a three-stage drop-down list is available to the users.
Q.7 What is the investment limits for enterprises in manufacture?
Manufacturing Sector a. Micro Enterprises – Till 25 lakh b. Small Enterprises – 25 lakh – 5 cr. c. Medium Enterprises – 5cr-10cr.
Q.8 To whom we can term as the Micro, Small, Medium enterprises providing services?
For the purpose of Service Sector a. Micro Enterprises – Till 10 lakh b. Small Enterprises – 10 lakh-2 cr c. Medium Enterprises – 2cr -5 cr.
Q.9 What would be the role of “Udyog Bandhu” in the UAM?
The role of facilitating the creation and growth of enterprises in the States/UTsis not proposed to change in any manner whatsoever through UAM. No effect on the “Udyog Bandhu”.
Q.10 What would happen to those enterprises which do not have Aadhaar Number?
At present Aadhaar Number is mandatory for registration under UAM. However, the Government of India will find a way out for covering those cases where Aadhaar Number is not available.