Who is Eligible for Udyog Aadhaar in India?

19 February 2025

Udyog is a Hindi word, which refers to an enterprise. Udyog Aadhaar is actually an initiative of the Indian government that simplifies the process of registering Micro, Small, and Medium Enterprises (MSMEs) in India. The registered companies under this model are recognized via a unique identification number. Also, they leverage many other benefits, like subsidies, loans, and government schemes. 

This post will introduce you to guidelines, covering the eligibility criteria, benefits, and registration process of the Udyam Aadhaar.

 

What is Udyam Registration?

Udyam registration, or Aadhaar, is a digital facility, which people can do online. They can self-declare the replacement of the earlier Udyog Aadhaar Memorandum (UAM). It helps MSMEs to be recognized as a business entity. Fortunately, its registration is absolutely free and a digital process. 

 

Eligibility Criteria for Udyam Registration

For a Udyam Registration, a business venture should be categorized under a

Micro, Small, or Medium Enterprise (MSME). This categorization will be based on two metrics: 

• Investment in Plant and Machinery or Equipment
• Annual Turnover 

 

The eligibility criteria are as follows:

Let’s dive into the competencies to register an Udyam. 

1. Micro Enterprises

• Manufacturing Sector: For microenterprises in manufacturing, the investment bracket should be limited to ₹1 crore, and annual turnover should not be more than ₹5 crore.
• Service Sector: In services, the investment in equipment should be restricted to ₹50 lakh, and annual turnover should not surpass the ₹5 crore limit.

2. Small Enterprises

• Manufacturing Sector: For small enterprises, the investment in its plant and assets should lie between ₹1 crore and ₹10 crore, and annual turnover should be between ₹5 crore and ₹50 crore.
• Service Sector: Equipment in this sector should cost between ₹50 lakh and ₹5 crore, and annual turnover should be measured between ₹5 crore and ₹50 crore.

3. Medium Enterprises

• Manufacturing Sector: These enterprises should restrict their investment in plant and machinery between ₹10 crore and ₹50 crore, whereas annual turnover should fall between ₹50 crore and ₹250 crore.
• Service Sector: Investment in the assets should be between ₹5 crore and ₹10 crore, and annual turnover should be between ₹50 crore and ₹250 crore.

 

Who Can Apply for Udyam Registration?

Now comes who is able to apply for Udyam Registration. 

1. Proprietorships

Sole proprietors are able to register under Udyam, as they operate the entire business alone. 

2. Partnerships

Those registered as a partnership firm, including Limited Liability Partnerships (LLPs), can go for this registration.

3. Hindu Undivided Families (HUFs)

HUFs operating a business venture or engaged in business activities can apply for this registration.

4. Private and Public Limited Companies 

Both private and public limited companies’ owners are allowed to register this Udyam.

5. Co-operative Societies

Cooperative societies that continue to manufacture or offer services can register.

6. Trusts and NGOs

Trusts and NGOs involved in commercial activities are also eligible. 

 

Key Documents Required for Udyam Registration

Before going through the registration procedure, get ready with these documents. 

1. Aadhaar number of the business owner or authorized person

2. PAN Card or Permanent Account Number (PAN) of the business 

3. Business details, such as name, address, and type of activity (manufacturing or service). 

4. Bank account number and IFSC code. 

 

Benefits of Udyam Registration

This registration attracts numerous advantages to MSMEs, ranging:

1. Access to Government Schemes

For those who are registered MSMEs, they can claim various government schemes, such as the Credit Guarantee Fund Scheme, Prime Minister’s Employment Generation Programme (PMEGP), and Subsidy on Patent Registration.

2. Collateral-Free Loans

MSMEs can easily apply for collateral-free loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme.

3. Tax Benefits

The registered MSMEs can enjoy tax rebates and exemptions under the Income Tax Act. 

4. Preference in Government Tenders

The registered enterprises are favored when it comes to preferring government procurement tenders.

5. Subsidy on International Trade Fairs

These can obtain subsidies for being involved in international trade fairs and exhibitions. 

6. Protection Against Delayed Payments

The MSME Samadhaan Portal is there to leverage for filing complaints against delayed payments from buyers. 

 

How to Register for Udyam

For registration, you need to hire a compliance or company registration consultant for end-to-end guidance. Typically, these steps are followed:

Step 1: Visit the Udyam Registration Portal.

Get registered with the official Udyam Registration portal, which is [https://udyamregistration.gov.in/](https://udyamregistration.gov.in/).

Step 2: Enter Aadhaar Details

Input the Aadhaar number of the business owner or authorized signatory. 

Step 3: Fill in Business Details

For the registrar's record, input details such as business name, type, address, and PAN.

Step 4: Provide Investment and Turnover Information

Specifically state how much investment in plant and machinery/equipment is done and also the annual turnover.

Step 5: Submit the Application

Once filled in, thoroughly audit the details and submit the application.

Step 6: Receive Udyam Registration Certificate

As your application is verified, the Udyam Registration Certificate will be issued and sent to the registered email ID. 

Important Points to Note

1. No Registration Fee: This registration is absolutely free of cost. 

2. Validity: You don’t have to review it as it comes with a lifetime validity.

3. Updation of Information: If there are any changes in the business information, such as turnover and investment, update them every year.

4. Integration with GST and Income Tax: The Udyam Registration portal is integrated with GST and income tax systems for seamless verification. 

 

Conclusion

Udyam Registration is a game-changer for MSMEs in India, offering a simplified registration process and access to a wide range of benefits. Whether you’re a small business owner, a startup, or a medium-sized enterprise, registering under Udyam can help you to discover growth opportunities and compete effectively in the market.