Running a small business in India is difficult, but Udyog Aadhar Certificate (now Udyam Registration) has made it a little easier. To put it simply, this is an “official ID Card” of your Business which is given by the government of India.
Earlier, for business registration, it took time and many papers were filled but now this work is completely online and completely free. The Udyog Aadhar certificate was discontinued by MSME Department and currently it is known as Udyam Certificate.
If you have this certificate, then whether you want to take a cheap loan from the bank or avail the benefits of government schemes, the work goes much faster. This guide will show you how this little certificate can help you expand your shop or factory.
What is a Udyog Aadhaar Certificate?
It is a MSME Certificate that includes a 12-digit unique identification number that was provided to Micro, Small, and Medium Enterprises (MSMEs). It was also known as “Udyam Registration“.
- Simplicity: Previously, this process was very lengthy (EM-I/II), but the government simplified it, making it online and free of charge, requiring only an Aadhaar card.
- Paperless: It did not require the submission of any physical documents.
Eligibility for Udyog Aadhar Certificate
Udyog Aadhaar was available for the following categories:
- Manufacturing: Units involved in producing goods.
- Service Sector: Businesses providing services (such as consultancy, repair services, etc.).
- Trading: Wholesale and retail traders.
- Organisational Structure: Proprietorships, Partnerships, LLPs, or Private Limited Companies.
Main benefits of Udyog Certificate
The main benefits of the Udyog Aadhaar certificate are as follows:
- Loan without guarantee: It becomes easy to get a business loan from banks without any collateral.
- Interest rate relaxation: There is a relief of 1% to 1.5% in interest rates on bank loans.
- Priority in government tenders: Priority is given while filling government tenders, and an exemption is given in the security deposit (EMD).
- Subsidy facility: Subsidy is available from the government on patent registration, electricity bill and ISO certification.
- Relief in taxes and duties: Some special exemptions are available in direct taxes and excise duties.
- Payment security: If a buyer does not pay on time, the government assists in getting the payment done under the MSME Act.
Key Requirements for Udyog Aadhar Cerificate
Only the following basic information was required for registration:
- Aadhar card of the entrepreneur.
- Business name and address.
- Bank account details (with IFSC code).
- Investment and number of employees.
- NIC Code (as per category of business).
Important Update: From Udyog Aadhaar to ‘Udyam’
From 1 July 2020, the Government of India has further modernised the system of “Udyam Aadhaar” amd make udyog to udyam registration conversion mandatory.
- Old Certificates: It has now been made mandatory to migrate the old Udyog Aadhaar (UAM) to the Udyam portal.
- New System: Now it is fully integrated with Income Tax (PAN) and GST portal.
Who could get the Udyog Aadhaar Certificate?
Udyog Aadhaar (ab Udyam Registration) certificate can be obtained by any person or organisation that is doing any type of small or medium scale business (MSME) in India.
For this, there is no need for any big degree or big office. You can get logs of the following categories:
- Proprietorship: If you run a shop or any business alone.
- Partnership Firm: Do or do more than one person’s business.
- Hindu Undivided Family (HUF): Family business.
- Self-Help Groups (SHGs): Mahila mandal ya koi sahayata samooh.
- Companies: Private Limited or Public Limited companies.
- Co-operative Societies: Co-operative societies.
Udyog Aadhar registration mainly requires the entrepreneur’s Aadhar card. Apart from this, details like business name, type of organisation (proprietorship or partnership), bank details (with IFSC code), business address, investment information and main business activity had to be provided. This entire process was completely online and Aadhaar-based.
