To begin with the Udyog Aadhaar registration process and documentation, we need to know what Udyog Aadhaar is and what role it has to play in a country like India.
And also, who is directly affected by the implementation of Udyog Aadhaar in India.
MSMEs: What are they
Before going deeper into the registration process and documentation of the Udyog Aadhaar in India, we need to first have an idea about what MSMEs are and what crucial role it plays in Udyog Aadhaar.
The Micro Small and Medium Enterprises (MSME) sector has become a highly spirited and dynamic sector of the Indian economy over the last five decades.
They not only play an important role in giving large employment opportunities at a comparatively lower capital cost than large industries but most importantly, the MSMEs help in the industrialisation of India's backward and rural areas.
This reduces regional imbalances and assures more equitable national income and wealth distribution.
The MSME sector contributes largely to the socio-economic development of India.
There are three tiers of MSMEs: micro, small, and medium. It is the primary responsibility of the State governments to promote and develop MSMEs.
The Government of India also adds to the efforts of the State governments through various initiatives.
The primary role played by MSMEs is to assist the various states of India in encouraging entrepreneurship, employment, and livelihood opportunities in the changed economic scenario.
MSMEs: Scope
The scope of the MSME sector was broadened by the Micro Small & Medium Enterprises Development (MSMED) Act in 2006, which recognised the concept of "enterprise" and included both manufacturing and services sectors. Hence, under the MSMED Act, 2006, MSMEs are classified as –
- Manufacturing Enterprise: The enterprises that are engaged in the manufacturing or production of goods in any industry. The manufacturing enterprise is defined in terms of investment in plant and machinery.
- Service Enterprise: The enterprises that are engaged in rendering services and are defined in terms of investment in equipment.
MSMEs: Registration
Post-implementation of the MSMED Act in 2006, the MSMEs now started to be registered under the Government of India by filling out the Entrepreneurs Memorandum (EM), parts 1&2.
There was an issue raised with the registration process under the EM. Hence, this was ruled out, and a new universal registration system came into force under the Udyog Aadhaar Memorandum.
Udyog Aadhaar is a Unique Identification Number that is issued to micro, small, and medium enterprises (MSMEs), issued by the Ministry of MSME. Recently, the Udyog Aadhaar has been revised to Udyam.
Hence, any new MSME must now register under the Udyam Registration Portal and obtain his nominal certificate.
Udyog Aadhaar: What is it?
The Udyog Aadhaar is a 12-digit UID (Unique Identification) number that is given to the MSMEs after they register by the Ministry of Micro, Small, and Medium Enterprises.
Recently, the Udyog Aadhaar has been replaced with Udyam by the Government of India (GoI).
Any enterprise coming under the definition of MSME can obtain their Udyam Registration through the Udyam Registration portal.
For the facilitation of Udyog Aadhaar, MSMEs are issued a Udyog Aadhaar Certificate certifying that they are registered with the Ministry of MSME.
It is the Udyog Aadhaar Certificate that contains the Udyog Aadhaar Number of the enterprise.
With the change of Udyog Aadhaar to Udyam, enterprises with the Udyog Aadhaar Certificate have to re-register to the Udyam Registration Portal to obtain the Udyam Registration Certificate.
This certificate contains the unique registration number of MSMEs, and they can receive the benefits provided to the MSMEs by the Government of India.
Udyog Aadhaar: Registration
It must be mentioned that MSMEs with the Udyog Aadhaar Registration must re-register for Udyam Registration.
The registration process for MSMEs in the Udyam Registration Portal is a completely online process, and no fee is charged for the registration process. It is free of cost.
Registration of MSMEs for Udyog Aadhaar is also an online process by visiting their official website (https://services.india.gov.in/service/detail/udyog-aadhaar-online-registration-for-msme). After the change from Udyog Aadhaar to Udyam, MSMEs must visit the official Udyam website (https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm).
After visiting the official website for the registration process, you have to choose a category of MSME under which you fall, so you can move forward with the registration process and obtain the registration certificate.
The two categories are:
- New entrepreneurs who have not yet been registered as MSME; and,
- MSMEs who have registration under EM-2
Udyog Aadhaar: Registration Guidelines
You need to follow the following guidelines while filling out the Udyog Aadhaar Registration Form to complete the registration process.
- The applicant has to enter the 12-digit Aadhar number issued to him/her in the appropriate field.
- The applicant then has to fill in his/her name, the same as mentioned on the Aadhaar Card issued to the applicant. If the name does not match the name on the Aadhaar Card, then the applicant cannot continue with the registration process.
- In the following step, the applicant has to validate his/her Aadhaar Card details only, after which the applicant can complete the registration form.
- The applicant must also provide his/her belongingness to a particular social category, i.e., General, SC, ST, or OBC. The proof of belonging to SC, ST, or OBC will be asked by the appropriate authority, as and when required.
- The applicant shall now fill in the name of the enterprise by which it is known to his/her customers and must be a legal entity to do business. An applicant may have more than one business, and each business can be registered for a separate Udyog Aadhaar with the same Aadhaar number.
- The applicant will now have to select the appropriate type of organisation under which his/her business belongs to. The applicant must also ensure that the legal entity authorises his/her business to complete the online form (Udyog Aadhaar). If the number of businesses exceeds one, then one Udyog Aadhaar number will be issued for each business.
- The applicant must also provide the correct postal address of the business/enterprise, including the state, district, PIN, mobile number, and email address.
- The business commencement date also needs to be filled out by the applicant in the appropriate field.
- The applicant must also mention if his/her business enterprise is already issued a valid EM (1/2) as per the MSMED Act of 2006. If so, all the necessary details of the previous registration must be filled in. if not, the applicant must follow the steps of a new user seeking registration.
- Following this, the applicant has to mention his proper bank details, which are used for running the business. Along with the account number, the IFSC code of the bank should also be mentioned where the applicant has an account.
- The applicant then has to choose the major business activity, as it comes under manufacturing enterprise or service enterprise, for the Udyog Aadhaar registration.
- The applicant must then choose an appropriate National Industrial Classification (NIC) Code for his selected "major activity" of his business enterprise.
- The total number of persons directly employed and paid wages by the business enterprise must also be mentioned in the appropriate field.
- The appropriate field must also mention the total investment in plant and machinery. For example, if a business commenced in 2008 with a set of plant and machinery costing Rs. 50.00 lakhs and has an addition of plant and machinery of Rs. 25.00 lakhs, then the total investment in plant and machinery is taken to be Rs. 75.00 lakhs.
- Then, the applicant has to fill in the location of the District Industry Centre (DIC) based on the location of the business enterprise. If there is only one DIC in the district system, it will automatically assign you to that DIC, but if there is more than one DIC, then you can choose.
- After filling out all the necessary details, the applicant has to click on the Submit button to submit the form and generate the acknowledgement number.
Udyog Aadhaar: Registration Process
The registration process for the Udyog Aadhaar process is really simple, and as follows –
If you are a new MSME, then you need to click on the “For New Entrepreneurs who are not Registered yet as MSME” button on the homepage of the portal and fill out the registration form online.
There is an option for entrepreneurs to register their business enterprises with or without a PAN Number.
They have to provide all necessary details regarding their PAN Card during the verification process, along with personal details, enterprise details, bank details, etc.
After you submit the form, a successful registration message from the MSME and a reference number will be sent to you.
After the verification process, the Registration Certificate is issued to the MSME quickly.
In the new setup, i.e., the change from Udyog Aadhaar to Udyam, MSMEs with Udyog Aadhaar Registration have to click on the "For those having registration as EM-2 or UAM" button shown on the portal of the homepage.
You need to follow the above-mentioned “Registration Guidelines” to fill in the registration details, and your registration process will be completed.
Documents required for the New Registration Process of Udyog Aadhaar
If your business comes under the category of a new MSME that wants to register for Udyog Aadhaar, you need the following documents for the registration process –
- Name of owner
- Personal Aadhaar number
- Category of the applicant
- Name of business enterprise
- Type of organisation
- Bank details
- The key activity of the business enterprise
- National Industrial Classification (NIC) code
- Number of persons employed directly
- Details of the District Industry Centre (DIC)
- Date of commencement of business
Conclusion
If you have a business that is registered for Udyog Aadhaar, then you can avail of certain benefits such as –
- Access to exclusive government subsidies
- Easier access to government provisions to practice business in India
- Access to loans without a guarantee and also at subsidised rates
- Ability to apply for micro-business loans and also for other related schemes
- Access to financial support for attending foreign expos
Hence, it can be concluded that Udyog Aadhaar for MSMEs is a useful scheme under which the MSMEs can benefit a lot and also witness an enhancement of their business scope and models.
FAQs related to Udyog Aadhar
1. Can a business enterprise file for more than one Udyog Aadhaar registration?
Yes, an applicant may have more than one business, and each business can be registered for a separate Udyog Aadhaar with the same Aadhaar number as the applicant.
2. What are the benefits of Udyog Aadhaar registration?
If you register for Udyog Aadhaar, you can get the benefits of all the government schemes for MSMEs. You also become eligible for government subsidies and other facilities provided exclusively for MSMEs.
3. What documents do you need to register for Udyog Aadhaar?
The documents needed for registration of Udyog Aadhaar are – Name of owner, Personal Aadhaar number, Category of the applicant, Name of the business enterprise, Type of organisation, Bank details, The key activity of the business enterprise, National Industrial Classification (NIC) code, Number of persons employed directly, Details of the District Industry Centre (DIC), and Date of commencement of business.
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