Udyog Aadhaar Registration supports one of the primary focuses of the current central government led by PM Narendra Modi which focuses to make doing business in India easier and free from bureaucratic hurdles. The government has sought to extend this focus not only to large-scale businesses but also to smaller businesses which form a large chunk of the industry in India. The facility of Udyog Aadhar Registration is a step in this direction.
The Udyog Aadhar is a unique 12-digit identification number (like a regular Aadhaar number) assigned to a micro, small or medium enterprise issued by the Ministry of Micro, Small & Medium Enterprises (MSME) to facilitate registration, identification and conducting of the business of micro, small and medium enterprises through a single document. Introduced in 2015, under the Micro, Small and Medium Enterprises Development Act, 2006, the Udyog Aadhar Registration replaces the previously existing method of filing multiple Entrepreneurship Memorandum forms (upto 11!), which were a cumbersome and long-drawn process for registering any micro, small or medium enterprise. The government realised that the existing procedure before Online Udyog Aadhar Registration was more prohibitive and obstructive in nature than facilitative for an enterprise that was not doing business on a large scale. The new process of Udyog Aadhar Registration or Udyog Aadhaar Memorandum (UAM) is much more entrepreneur-friendly, is based on self-declaration and requires the filing of a simple one-page form, which is completely online and free of cost. It provides several benefits such as concessions on stamp duty and on electricity consumption, faster approval of loans and subsidised interest rates, easier access to government schemes, etc. This facility is also available for startups and helps them easily avoid the ‘red-tape’ that is a big concern for any business in India. To avail these facilities, startups or small enterprises have to get Udyog Aadhar Registration done.
Udyog Aadhar Registration is required for small industries who comes within the definition of MSMEs. Before proceeding further, let’s first understand these small industries one by one.
Micro, Small and Medium enterprises (MSMEs)
In order to achieve targeted policy-making and to ensure that the benefits of the schemes announced and implemented by different governments reach the intended beneficiaries, it is essential that such recipients or beneficiaries be clearly identified and defined. To this end, the Micro, Small and Medium Enterprises (MSMEs) Development Act, 2006 lays down a clear definition of such enterprises.
The Act categorizes these enterprises into two broad categories: those which are “engaged in the manufacture or production, processing or preservation of goods” and those “engaged in providing or rendering of services”. This broad distinction between enterprises dealing in goods and services each further subdivided into ‘micro, small and medium’ categories on the basis of monetary investment made (excluding the money spent on acquiring the land or building). For those enterprises dealing with physical goods, an investment up to 25 lakh in “plant and machinery” will make it a ‘micro’ enterprise. Similarly, an investment of more than 25 lakh but less than 5 crore will label the enterprise as ‘small’, whereas an investment between 5 and 10 crores will lead to it being called a ‘medium’ enterprise. The corresponding ‘equipment investment limits’ for enterprises dealing with services are as follows: upto 10 lakh : micro; more than 10 lakh but less than 2 crore: small; more than 2 crore but less than 5 crore: medium. This is how we currently identify and define MSMEs in India.
However, in February 2018, the central government approved a proposal to shift to a ‘turnover’-based definition of MSMEs. Though the proposal has been approved by the Union Cabinet, the Act is yet to be amended by the Parliament to incorporate the new definition. Once amended, the new definition will be more realistic and relevant than the 2006 investment-based definition which has become outdated due to several factors over the years.
Small Scale Industries (SSIs)
As the name suggests, small scale industries (SSIs) are those which deal with either goods or services on a small or minuscule scale. The ‘scale’ here may refer to: the size of the business operations, the number of people employed, the production output or turnover, etc. These types of industries are specifically benefited from Online Udyog Aadhar Application.
The current official definition of such industries is based on the amount of investment made by the entrepreneur excluding the amount spent on acquiring the land or premises for operations.
Small scale industries (SSI) usually have limited monetary resources to purchase sophisticated machinery & equipments and are therefore more labour-intensive. This labour-intensive nature of small scale industries helps generate a substantial amount of employment opportunities and hence they form a crucial part of any economy. Small scale industries(SSI) are also characterised by the unison of ownership and management. The proprietors are usually the ones in charge of the management of the enterprise. Also, the geographical reach of such SSIs is limited and this means that not only do they usually cater to their local consumers and markets only but they also help in the effective utilisation of their region’s local resources. SSIs are sometimes more robust than large scale industries as the size of their operations provides them a certain flexibility which helps them adapt to any change in circumstances. SSIs also include handicrafts and cottage industries.
SSIs account for nearly 40% of all goods and services produced in India. They also make up nearly half of the total exports of India. No wonder then that SSIs receive special attention from the governmental policy-makers in terms of concessions, subsidies and easy & cheap credit supply.
Udyog Aadhar Registration in India
For any government to be able to make policies for a country’s economy, it is essential that its policy makers have valid and updated data available to them. Consequently, modern governments and the regulatory agencies under them stipulate that industries whether large or small, officially register themselves and their operations.
India had previously been infamous for its bureaucratic hurdles for industry (the license & permit raj of the 1960s and 1970s). The situation changed gradually with the advent of liberalisation and the Internet. Governments now focus on the ‘ease of doing business’ and do everything possible to make running of enterprises smooth and hurdle-free. Udyog Aadhar Application is one such step in progress.
Earlier, the MSME registration online happened through physical presence before the District Industry Centre and filing upto 11 forms for the registration. This procedure of Udyog Aadhar Registration has now been simplified and made extremely user-friendly after the introduction of the Udyog Aadhaar Memorandum (UAM) form. The entrepreneur in Online Udyog Aadhar Application now needs to just fill up a single page form-online, through self-declaration mode and absolutely free of cost.
That we have discussed a new term in the above section, i.e. Udyog Aadhar Memorandum. Let us discuss this first before proceeding to the registration process.
Udyog Aadhar Memorandum
This memorandum is a kind of affidavit in which the the applicant solemnly state that the information he is providing in the the affidavit is true to his knowledge. It works as an Udyog Aadhar application form through which unique Udyog Aadhar Number is allotted to the applicant. In the memorandum, the applicant has to state the place of his business and other proof regarding the existence of his business including bank account details of the business he is running and Aadhar details of the applicant himself, etc. As it is an affidavit, so the memorandum is a single-page self-declaration form which is submitted to the authorities for the purpose of availing the Udyog Aadhar registration certificate.
however, not every applicant is required to file this memorandum. Those who have already filed the EM-I and EM-II form, are not required to file this memorandum. However, if they wish then they can also file it.
After filing the memorandum, the applicant will receive an acknowledgement number hich would be unique and sent to the registered email address of the applicant.
After Udyog Aadhar registration is complete, the unique Udyog Aadhar number is issued. This application does not require any registration fee and it is free of cost. The applicant can get the Udyog Aadhar certificate at zero cost.
Udyog Aadhar Registration Online Procedure
The Udyog Aadhar Registration process is as follows:
- One MSME can be registered at a time. For multiple registrations, the Udyog Aadhaar Registration process needs to be repeated.
- First, the applicant has to visit the website of Udyog Aadhar at https://udyogaadhaar.gov.in/. On the website, in the new registration section, start the procedure of registering.
- The form has to be filled by the applicant by filling in all details asked.
- The entrepreneur has to certify the existence of his enterprise and provide necessary details like his/her name (exactly as in his/her personal Aadhaar), social category, name of the enterprise, whether it is dealing with goods or services, the amount of investment in plant and machinery, the number of people employed, the date of commencement of activity, bank account details, Aadhar number of the owner of the enterprise, details of any previous registration (if any), etc.
- Once submitted, the form will be digitally verified through a one-time password sent to the registered mobile number linked to the Aadhar of the owner (which has been entered while Udyog Aadhaar Registration). Once this OTP is entered correctly, the form will be verified and a Registration Certificate containing a unique Udyog Aadhaar Number will be delivered to the email id entered while filling the form.
- No documents have to be submitted/uploaded nor has any fee to be paid. The Online Udyog Aadhar Application is completely free of cost.
- In case the entrepreneur does not have an Aadhar, he will have to go to the office of the District Industry Centre in his district and physically submit documents and proof that he has applied for an Aadhaar.
The Advantages of Udyog Aadhar Registration Online
- The primary benefit of the online Udyog Aadhar Registration is that it helps a MSME register itself without having to interact with the bureaucracy. The entrepreneur-bureaucrat interface is removed.
- The online Udyog Aadhaar Registration facility removes the apprehensions that an entrepreneur may have with regard to registrations done through government offices and the slow and cumbersome procedures associated with them. Earlier, this same process of registration was too hectic that it would consume a lot of precious time of the businessman and that would cost him a fortune. In business, the slogan of “Time is Money” is best suited. This online process has removed all of that.
- The online Udyog Aadhaar Registration method also helps eradicate the intervention of touts and brokers which had become rampant evils in and around government offices. They would act as middlemen to complete the whole MSME registration process and in the process, they would charge hefty fee to provide their services which were, in a sense, unnecessary. With the inception of Udyog Aadhar registration services, they have gone invisible.
- The online method of Udyog Aadhar Application is through the self-declaration mode which doesn’t require any documents to be submitted/uploaded at the time of filing the form.
- The online method also ensures that the process of Udyog Aadhar Application is completely transparent and extremely speedy. Transparency in online Udyog Aadhar Registration has removed any chance of corruption and red tape, thereby bringing a relief to the small traders and businessmen.
- The online mode helps make the MSME registration online extremely user-friendly, easy and free of cost- something which is required, owing to the time and monetary constraints that such enterprises usually face.
- The ease and advantages associated with online Udyog Aadhar Registration will help more and more MSME registration and help the government collate data on them more efficiently. This way compliance of Udyog Aadhar Registration has increased and many small industries active in the unorganised sector have been mainstreamed in the formal economy.
Benefits of Udyog Aadhar Registration in India
Udyog Aadhar Registration is a means of recognition and this recognition entails several Udyog Aadhar benefits. They are –
- Government recognition for the MSME which brings several benefits.
- After Udyog Aadhar registration, enterprises can get guarantee-free loans and at cheaper interest rates and a steady supply of credit if they register themselves.
- Legal protection is also provided against late payments of loan installments.
- Enterprises can claim concessions on electricity bills, stamp duty, patent filing fees and many similar fees and expenses.
- They can apply for gaining any benefit under any government scheme for MSMEs such as 15% subsidy under CLCSS scheme that is given by the government for technical advancements of MSMEs.
- They can also claim subsidies available to MSMEs such as subsidy in barcode registration fee, NSIC performance and credit ratings.
Documents and Information Required for Udyog Aadhar Registration
The entire process of Udyog Aadhaar registration/ Udyog Aadhar Application is free, online and based on self-declaration. No documents have to be submitted nor has any fee to be paid for the process. The information that has to be supplied in Udyog Aadhar Registration is as follows:
- The entrepreneur has to certify the existence of his enterprise by providing documents related to it such as address proof of place of business.
- Provide necessary details like his/her name (exactly as in Aadhaar), social category, name of the enterprise.
- Whether it is dealing with goods or services.
- The amount of investment in plant and machinery.
- The number of people employed and the nature of their employment.
- The date of commencement of activity.
- Bank account details of the owner or authorized signatory or partners, as the case may be.
- Aadhar number of the owner of the enterprise.
- Details of any previous registration (if any).
- District, address of the enterprise, etc.
FAQs related to Udyog Aadhar Registration in India
CompanyVakil.com : MSME Registration/Udyog Aadhar Registration Services
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Our MSME registration online services provide a seamless and hassle free experience to get your enterprise registered through the new process: the Udyog Aadhar Registration. This Udyog Aadhaar Registration will bring government recognition for your enterprise, easier and speedier loans, concessions and subsidies and benefits of schemes announced by different governments for MSMEs. At CompanyVakil.com, this process takes less than 48 hours.
Our legal team will get in touch with you for gathering the essential information about you and your enterprise and within a day we will deliver the Udyog Aadhaar Certificate to you with the unique UA number so that you can get your business up and running. So, don’t wait, get in touch with our experts now and get all the advantages your enterprise and your hard work deserves!