UDYAM – A newer Udyog Aadhaar or More Than That?



For some now, the Indian government has taken numerous measures for reviving the small businesses, and that too aftermath of the deadlier COVID-19 pandemic. One of the latest initiatives in this direction has been the UDYAM registration initiative.


In India, the small businesses are referred to as MSMEs (i.e. Micro, Small, and Medium Enterprises), and are calibrated to be heavily supported by the Ministry of MSME. The classifications of MSMEs are based on the following criteria:

  1. Micro-Enterprise – When the investment in plant and machinery or equipment does not go above one crore rupees and turnover does not go above five crore rupees.
  2. Small Enterprise – When the investment in plant and machinery or equipment does not go above ten crore rupees and the turnover does not exceed fifty crore rupees.
  3. Medium Enterprise – When the investment in plant and machinery or equipment does not go above fifty crore rupees and the turnover does not go above two hundred and fifty crore rupees.

Until recently, the registration of MSMEs in India is largely facilitated by the Udyog Aadhaar registration, which is a twelve-digit number issued by the Ministry of MSME for the identification purpose of MSMEs. The process was initiated in the later-half of the year 2015 under Udyo gAadhaar Memorandum (UAM).

However, now the Indian government has revamped the erstwhile tedious registration process into a simpler MSME registration process, known as the UDYAM registration process.

Differences Between UDYAM and Udyog Aadhaar

Though UdyogAadhaar has many advantages, the process for registering the same is somewhat consuming and requires more document work. However, the UDYAM registration process has substantially reduced the procedural format that business owners had to go through to register their business as MSME. Otherwise, UDYAM is the superior version of Udyog Aadhaar albeit with many added advantages.

The basic differences between the UDYAM and Udyog Aadhaar have been listed below:

  UDYAM Udyog Aadhaar
Portals Udyam Portal Udyog Aadhaar Portal
Registration Number Udyam registration number Udyog Aadhaar Number
Document Requirements Only the Aadhaar Card of the Applicant Aadhaar card and PAN of the applicant
Certification Verified Certification Self-Certification
Integration with other Government portals Yes (Government e-Market (GeM) portal, and

TReDS portal)

Mandatory Tax Registration Requirements Income tax (PAN) and GSTIN details required Not required
Enterprise registration One Aadhaar can have only one enterprise registration One Aadhaar can have multiple enterprise registrations
Composite limits (i.e. investment and Annual turnover limit) for classifications Same limits for manufacturing and service sectors Distinct limits for manufacturing and service sectors
Employee Details Only the number of employees Data based on gender segregation

UDYAM registration allows single window registration as an MSME without the hassles of uploading related documents, proofs, certificates, etc. Also, the verification is done through the Aadhaar linked to a mobile number.

Benefits of UDYAM Registration

Like the Udyog Aadhar, UDYAM too has too many advantages associated with it, like:

  1. Easier loan processing through MSME associated schemes
  2. Bank loans without the requirement for collaterals, guarantees, etc.
  3. Loans with attractive and lower-interest rates
  4. Excise and direct tax laws exemptions
  5. Subsidies of up to 50% for registering the intellectual property rights (IPRs) like patent, trademark, copyrights
  6. Tax rebates, exemption of up to 1% on interest rates on bank overdraft, etc.
  7. Subsidies on electricity bills
  8. Preference in competing for government tenders
  9. Support for attending business expos
  10. Easier bank account opening options

UDYAM Registration and IPLF:

The advantages of MSME registered companies are always higher compared to that of the unregistered companies and even the government mostly prefers the MSME registered companies for their tenders. Further, to reap the benefits of the government schemes and to build a business with a reputed name, one must register their small businesses as MSME through UDYAM registration. Being a team of experienced professionals and experts in various registration requirements, we can easily judge the best for your business.

Our IPLF team comprises highly skilled and trained professionals including legal and tax professionals to assist in hassle-free registration of your businesses as MSME through UDYAM registration procedures and hastening the registration of the same, which not only protect your business interests but also helps to kick-start your business in a short span of.

Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana & Khurana, Advocates and IP Attorneys.  In case of any queries please contact/write back to us at support@ipandlegalfilings.com

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