Introduction

 The global economy and in particular the economies of developing countries have been hugely reinforced by the building of micro small and medium enterprises. The small business organizations have become amazingly vibrant and increasingly flexible thus building the Indian economy.

Employment opportunities are generated at a rapid pace by developing the infrastructure and capital flows of MSMEs. MSME industries operate at a lower capital cost compared to be corporate industries. Small businesses and microenterprise entrepreneurs can help in the rapid industrialization of backward areas which results in eliminating regional imbalances and guaranteeing equitable distribution of wealth income and prosperity on a national level.

How MSMEs are increasing in importance?

•  The state governments are cast with the primary responsibility for the development and promotion of small businesses. However, the central government acts as an umbrella agent which aggregates the individual efforts of state governments by the introduction of various flagship programs.
• The Ministry of small and medium enterprises coordinates the efforts of the states and makes sure that the entrepreneurship quotient among the Indian youth is at a sharp edge.
•  With the blowing winds of change in globalization, individual entrepreneurship should be given prime importance on a national level to ensure that livelihood opportunities for the locals.
• It is like the concept of grass root level growth where the local population achieves prosperity by improving their employment opportunities.

Why Udyog Aadhar was introduced?

•  The majority of small business owners and entrepreneurs are bamboozled by the relentless paperwork that is required in the process of registering their business concerns. This is proving to be a hurdle for identifying the beneficiaries of flagship government programs. Thanks to the wide-ranging efforts of the Ministry of MSME, the Udyog Aadhar system has introduced a streamlined registration process.
•  The operational kinks in the web portal are ironed out and diverse coverage of the Udyog Aadhaar scheme is being displayed to medium and small enterprises. This leads to a greater understanding of the various benefits of skill development schemes of the state and Central governments.
•  Udyog Aadhar has introduced interlinking cooperation between Government-run banks and business enterprises. There is no need to apply separately for upcoming limits.
• Udyog Aadhaar Memorandum (UAM) has made the lives of many business owners easier by offering a provision to get their application form filled online at – https://udyamregistration.gov.in/Government-India/Ministry-MSME-registration.htm

What is the Udyog Aadhaar memorandum?

 Udyog Aadhaar memorandum is a comprehensive registration document that comprises of a self-declaration form. This valuable document ensures that the business firm has achieved self-certification status with regards to the following aspects of business operations:

•  Details of bank account
•  Personal and Professional details of promoter and owners

Salient points about the application process of Udyog Aadhaar

1. The government has mandated that no fees will be charged for getting a Udyog Aadhaar card. After submission of the form, the generation of the Udyog Aadhaar acknowledgment takes place and is duly sent to the registered email address, containing a distinctive Udyog Aadhaar number.

2. When coming to the existing enterprises which have submitted Memorandum 1 and Memorandum 2 in the entrepreneurship category, they will not be asked to apply for the Udyog Aadhaar memorandum separately. Entrepreneurs can file for a separate UAM number on their own accord.

3. There are no specific restrictions limiting the issue of the Udyog Aadhaar memorandum based on a single Aadhaar number.

4. Self-declaration basis is the core concept of Udyog Aadhaar. There is no requirement to upload a supporting document while filling the Udyog Aadhaar application. However, the state government and any such allied institutions are authorized to ask for documentary proof when applicants are feeling the Udyog Aadhaar Memorandum.

What are the various eligibility criteria of Udyog Aadhaar?

 Udyog Aadhaar registration can be availed by the following categories of businesses and commercial enterprises:

•  Hindu undivided family
•  Proprietorship
•  Partnership
•  One Person Company
•  Private limited companies
•  Limited liability partnerships
•  Association of persons and cooperative societies

Important Updates on Udyog Aaadhar 2021

• The business enterprise can complete the Udyog Aadhar application either online or offline effective from April First, 2021.
• Registration for Udyog Aadhaar can be completed either through online platforms such as websites or mobile app; or through offline processes such as visiting the local Udyog Aadhar office.
• Individuals can register for more than one business. Udyog Aaadhar policy provides for the facility of multiple industry registrations for a single individual.

Documents necessary for successful application of Udyog Aadhar

• The owner of the MSME has to issue a self-certification document confirming the existence of the business. The business owner also needs to give complete details regarding all activities of the business.
•  Financial information which is linked with the Government of India finance ministry has to be inputted into the application form.
• Proof of ownership of the business enterprise, details of employment and all other contingent information related to the successful functioning of the assembly have to be furnished.
•  This process does not involve the payment of registration fees. There is Zero charges for applying on the Udyog Aadhaar platform.
•  After successfully filling in all the required details, the registration number is self-generated. The same registered number is sent to an email address. This is the Udyog Aadhaar number.

Process of registration for Udyog Aaadhar

 Step 1 Visit the official website of Udyog Aaadhar

 Step 2 Input the Aadhaar number and populate the fields with the required information such as names of entrepreneurs

Step 3 The application holder should enter different details such as the name of the enterprise and the category of the organization. After clicking the next button, the website redirects to a different page.

Step 4 An option of re-verifying the already entered data will be given. The customers should not refresh the page at this point in time and after verifying the details and confirming their accuracy, they should click on the submit button.

Udyog Aadhar certificate

It is a recognition certificate that is given to enterprises of micro small and medium nature by the MSME ministry. The certificate is given to those who complete successful registration of their business to the Udyog Aadhaar world.

• The business is now officially certified by a distinctive number printed on the Udyog Aaadhar certificate. This certificate opens doors to business owners to get compensated on electricity bills, bank interest rate deductions and top priority in awarding government contracts.
• Udyog Aadhaar memorandum is a single-page affidavit that is required by the MSME department for business registration.
• Multiple Udyog Aadhar numbers can be opened on a single Aaadhar number. Acknowledgment number will be sent to the business owner’s registered email address.
• Download UAM Certificate – https://udyamregistration.gov.in/UA/PrintAcknowledgement_Pub.aspx

Documents required for Udyog Aadhar registration

1. Aadhaar number

 This refers to the 12 digit UID number given to the applicant. In the case of proprietary enterprises, the UID number is substituted by the authorized partner or the managing partner of the firm.

2. Name of the promoter

 The applicant’s name is taken exactly the same as which is printed in Aadhar Card

 3. Category

 To denote the social categorization status such as other backward castes, scheduled caste, scheduled Tribes and general category. This document is given in the local revenue office.

 4. Name of the business

 The brand name of the enterprise should be registered with the government. Separate Udyog numbers are given to multiple enterprises

 5. Nature of organization

This detail indicates the status of the business firm such as:

• Partnership firm
• Hindu undivided family
• Proprietorship
• Cooperative societies
• Self-help groups
• Limited liability partnerships
• Cooperative institutions

Benefits of utilizing Udyog Aadhar registration

• There are multiple benefits of Udyog Aadhar registration such as easy credit facilities, collateral-free loans decreased rates of interest and subsidized rates on infrastructural loans.
• Getting a Udyog Aadhaar number opens multiple doors in the global markets for local businesses. Udyog Aadhaar number is an assurance given by the government of India that their business needs will be taken care of at the highest level.
• Udyog Aadhaar number induces legitimacy to the small business brand and gives it the potential to catapult its products into an orbit of international stature.
• The present socialist government is concentrating on giving a helping hand to small businesses and farmers. This is a boon to small business owners as it gives legitimacy to their business operations.
• Udyog Aadhaar number should definitely be taken by entrepreneurs and small business owners so that they get the initial helping hand from the government.

Current Bleak Economic circumstances and Udyog Aadhar Card

In these present and circumstances, small business owners are struggling in manifold ways. The government is taking every step to ensure that it induces resilience into the manufacturing services and small business sector.

Udyog Aadhar Card and Current Account

• Having a current bank account is one of the basic fundamentals of a small business. In the manufacturing and services industry, an indication of significant cash flows in the current account is a future symbol of prosperity. Banks who want to lend credit to the business will ask for the last 2 years’ bank statements of your current account.
•  Opening the Udyog Aadhar account will make sure that the business owner will receive a hassle-free current account application process from the financial institutions. The government and RBI have issued guidelines mandate in banks that they should not turn away any business owners with Udyog Aadhar card for opening a current account.

Financial Benefits of Udyog Aadhar

• The credit guarantee scheme is a wonderful way to increase trust in your small business. CGSTE scheme makes sure that the business remains in working functionality even when sudden fluctuations occur in global markets.
•  It is not an exaggeration to say that business growth is greatly exemplified by ensuring the successful registration of the Udyog Aadhar card. The core government schemes need to be availed by the business owners. Easy access to credit in the early times of the business ensures that the competitive advantage of the enterprise is maintained.
• Unsecured business loans are easily granted to business firms that have Udyog Aadhar Card. In these times of credit deficiency, the business owners need all the help they can get by registering for Udyog Aadhar Card
• The business growth can be increased by exposure to government schemes. Udyog Aadhaar card is a wonderful mechanism to get business loans for purchasing machinery, hiring skilled employees and expansion of infrastructure to meet global competition.
• The vendors of your business will also be satisfied due to the timely honoring f their payments due to the increased quantum of bank loans to Udyog Aadhar cardholders.

How can I check the online certificate of Udyog Aadhaar for my business?

Udyog Aadhaar verification can be completed by the following steps:

Business owners need to visit the official website of UAM

•  The unique 12 digit UAM number should be entered
•  Valid verification code in the form of a Captcha image needs to be validated by the system.
• Click verify button

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Udyog Aadhaar News

MSME Ministry extends the validity of Udyog Aadhaar registration till June-end

The government has extended the deadline for MSMEs with UAM licenses to transition to Udyam registration. According to the Ministry of Commerce and Industry, this will allow them to continue receiving different government programs and incentives, including priority sector loans (MoCHI).

• MSME Ministry extends the validity of Udyog Aadhaar Memorandum (UAM) registration till June 30, 2022, from March 31, 2022. 
• The government introduced the Udyam portal in July 2020 to substitute the UAM registration system and simplify the online procedure for businesses to register as MSMEs. 
• The latest UAM extension was declared in a notification by the MSME Ministry. In 2020, the RBI announced that existing Entrepreneur Memorandum II and/or UAM registrations obtained before June 2019 would be valid until March 2021.

AUAM registrations reached 1,02,32,451 (1.02 crore) between September 2015 and June 30 2020. However, data on the share of existing MSMEs migrating from UAM wasn’t available.

Updated Date: 27th May 2022

Udyog Aadhaar Memorandum to remain effective for now

As per the Government, UAM (Udyog Aadhaar Memorandum) registrations would remain valid for a limited time for MSMEs to migrate to the new portal and receive benefits. One such benefit includes Priority Sector Lending provided by the government of India to the MSME industry sector. 

The government had extended the validity of the licenses till Dec 31, 2021, from earlier March 2021. The official informed that the MSME could migrate to the Udyam Registration portal to carry on as an MSME.

Before the MSME Development Act, 2006, small-scale industries were registered with the DICs (District Industries Centres). After the act was implemented, entrepreneurs were required to file EM-I at DICs before setting up the MSME. After beginning the production work, they had to file EM-II.

According to the MSME Ministry’s annual report 2020-21, EM-II filings between 2007 and 2015 was 21,96,902, and between September 2015 and June 30, 2020, they went up to 1,02,32,451 (1.02 crore).

To ease business for MSMEs, the government introduced the Udyam portal. However, the government is yet to announce the exact time for the expiry of registration.

Updated Date: 26-01-2022