Difference Between Udyog Aadhaar & Udyam Registration

Many people are still confused about what is the difference between Udyog Aadhaar and Udyam registration don't worry please read our full article.

Introduction

The MSME sector is the backbone of the Indian economy, contributing significantly to employment generation and GDP growth. The government has launched various schemes and initiatives to support the development of this sector. One such initiative is the Udyog Aadhaar registration process, which was launched in 2015. It aimed to simplify the registration procedure for micro, small, and medium enterprises by offering a single-page online form based on self-declaration. The process required minimal documentation and was entirely free of cost, making it highly accessible for small entrepreneurs. Over time, however, the need for a more transparent, data-driven system led to the development of a new registration framework. Nevertheless, the Udyam Registration process has replaced the Udyog Aadhaar registration process.

What is Udyog Aadhaar?

Udyog Aadhaar is the name of the Micro Small Medium Enterprise (MSME) Registration Process, generally referred to as Udyog Aadhaar Registration. But this process has now been replaced by the Udyam Registration. It is a modified edition of the updated version. Introduced in 2015 by the Ministry of MSME, Udyog Aadhaar was designed to simplify the registration process for small businesses by allowing them to register with just an Aadhaar number and minimal information. The primary goal was to promote ease of doing business and bring informal enterprises into the formal sector. It enabled MSMEs to access various government benefits such as subsidies, credit facilities, and protection against delayed payments. Over 1 crore businesses registered under this system before it was eventually replaced.

What is Udyam Registration?

Udyam is an online registration established by the Indian Government for micro, and medium enterprises (MSME). The MSME Udyog Aadhaar Registration was modified by the Indian Ministry of Micro, Small, and Medium Enterprises to Udyam. Udyam registration is required with the Aadhaar number for authentication.

Unlike the earlier Udyog Aadhaar system, Udyam registration is linked with PAN and GSTIN, allowing automatic data validation from Income Tax and GST portals. This integration ensures greater accuracy and prevents fraudulent registrations. Additionally, Udyam generates a unique registration number and certificate with a QR code that can be verified online. The new system simplifies access to various government schemes, including subsidies, credit facilities, and market support, thereby enhancing business credibility and promoting growth among MSMEs.

If you want Udyam registration then Register Now!

Difference between Udyog Aadhaar and Udyam Registration

For many of them, the difference between Udyog Aadhaar and Udyam Registration is still not clear, as there are many misconceptions about what is Udyog Aadhaar and Udyam Registration. Here are some differences between the two:

Registration Process: The structure of Udyog Aadhaar is smaller compared to Udyam Registration. However, on the Udyam portal, there is a lengthy structure, and it requires the specifics of income tax and GST for the enrollment cycle.

Verification: Udyog Aadhaar is not integrated with any other government portal, but Udyam Registration is fully integrated with government portals like GeM.

Authentication: Udyog Aadhar provides instant self-certification as per the old MSME norms, while Udyam Registration provides verified authentication as per the new MSME norms.

Benefits: Udyam Registration offers more benefits than Udyog Aadhaar, such as interest-subsidized rates for bank loans, bank collateral-free loans, Industrial Incentive Subsidy (IPS), subsidy eligibility, protection from late fees, materials provided/ Services, Special Benefits Reservation Policies Facilitation of Registration, Licensing and Approval in Manufacturing/Production Industry, Credit Rating Subsidy and NSIC Performance, Patent Registration Subsidy, Subsidy to Register Barcodes, 1% rebate on interest rates on bank overdraft, Special by Govt. 50% off fees for trademarks and patents.

Identification Number: Udyog Aadhaar provides a 12-digit unique identification number, while Udyog Registration provides a permanent identification number on the portal known as Udyam Registration Number (URN).

Benefits of Udyam Registration

Here are some benefits of udyam registration

• Rate of interest Subsidy for bank loans: The Udyam-registered MSMEs can access lower interest rates on loans. This has lowered the cost of borrowing, putting less financial load on the businesses. It enhances the movement of credit and attracts growth and investment.
• Banks free collateral loans: Loans can be sourced without offering security by the registered MSMEs.This facility is mainly provided as a government scheme, such as the CGTMSE. It stimulates access to finance among startups and small firms.
• Industrial Promotion Subsidy (IPS) Subsidy Eligibility: The Udyam-registered units also become entitled to different subsidies like the state and Central IPS. The subsidies are intended to facilitate industrial development in the backwards areas. The latter and capital investment subsidies, and infrastructure support are among the benefits.
• Protection from delayed fees and material/services rendered: MSMEs are protected against late payments by buyers. Buyers are required to pay in 45days, otherwise subject to interest. This makes the operations and cash flow of MSMEs better.
• In the manufacturing/production industry, special benefits reservation policies: There are a few products that the manufacture of is restricted to the manufacturing small scale medium enterprises. This saves them from competition from big industrial establishments. It fosters national production and entrepreneurial activities.
• Facility for registration, licensing, and approval: The Udyam registration makes it easy to get government approvals. Licenses and registrations are granted priority and expedited to the MSMEs.This minimises bureaucratic inefficiency and operations difficulties.
• Credit rating subsidy and NSIC performance: Subsidy for credit rating can be availed by registered MSMEs.NSIC assists in gauging and developing its financial credibility. This creates confidence in lenders, customers and suppliers.
• Patent registration subsidy: The government gives cash grants for filing patents. It assists in securing the innovation and intellectual property of MSMEs. This promotes innovation and research in small businesses.
• Subsidy to register the barcode: The MSMEs will receive financial support for registering barcodes on product packaging. Registration of barcodes enhances products and inventory management. It improves the acceptance of products in the retail market and the export market.

Benefits of Udyog Aadhaar

Here are some benefits of udyog Aadhar

• Eligibility for Government Subsidies and Schemes: After registering under Udyog Aadhaar, MSMEs become eligible for various government schemes such as technology upgradation, skill development, and infrastructure support. These subsidies help reduce business costs and promote growth. Being officially recognized as an MSME gives priority access to these benefits.
• Collateral-Free Loans and Low Interest Rates: Registered MSMEs can access collateral-free loans under schemes like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This means they don’t need to provide security or assets for loans. They also enjoy lower interest rates compared to standard business loans.
• Participation in Government Tenders: Udyog Aadhaar registration allows MSMEs to participate in government tenders with certain reserved quotas. They are often exempted from paying Earnest Money Deposit (EMD) or bid security. This improves their chances of winning contracts and competing fairly.
• Legal Protection Against Payment Delays: MSMEs registered under Udyog Aadhaar are protected under the MSMED Act in case of delayed payments. If a buyer delays payment beyond 45 days, interest is charged on the due amount.Complaints can be filed online through the MSME Samadhaan Portal for quick resolution.

Migration from Udyog Aadhaar to Udyam Registration

MSMEs registered under Udyog Aadhaar were required to migrate to Udyam Registration before March 31, 2021 (later extended). Those who failed to do so lost access to benefits and had to re-register.

Steps for Migration:

• Visit the Udyam Registration portal.
• Choose “For those already having registration as Udyog Aadhaar.”
• Enter Udyog Aadhaar Number and validate with OTP.
• Fill in updated details including PAN and GSTIN.
• Submit and receive new Udyam Registration Certificate.

Who are You?

udyamregisteration.org is a private registration consultant that offers ISO-certified support to organizations to obtain and collect the registration of MSME/Udyam/Udyog Aadhaar online and MSME Udyam certificate. We have over 7 years of experience in the registration of micro small medium enterprises under the MSME Ministry.

Here we have made it easy to print the udyamregisteration.org MSME Udyam certificate and fill in the basic application form to get the Udyam registration online.

Udyam Registration Certificate Sample Details

A Udyam Registration Certificate typically includes:

• Udyam Registration Number (URN)
• Name of the Enterprise
• Type of Organization (Proprietorship, Partnership, etc.)
• PAN and GSTIN
• Investment and Turnover
• Classification (Micro/Small/Medium)
• QR Code (for validation)

This certificate can be used as proof for participating in tenders, applying for MSME loans, and availing subsidies.

Common FAQs

Q1: Is Udyog Aadhaar still valid?

No. As of July 2020, Udyog Aadhaar is no longer valid for availing MSME benefits. Enterprises must migrate to Udyam Registration.

Q2: Can one business have both registrations?

No. Each enterprise should only have one Udyam Registration. Multiple registrations for the same PAN are not allowed.

Q3: Is Udyam Registration compulsory?

Yes, for all enterprises that wish to avail MSME benefits or be recognized as MSMEs.

Q4: Can an enterprise update its Udyam details?

Yes, details like investment, turnover, email, or contact info can be updated anytime via the Udyam portal.

Q5: Is there any fee for Udyam Registration?

No, the entire process is free and done online.

Conclusion

Finally, Udyam Registration is a new and improved registration process for MSMEs that has replaced the earlier Udyog Aadhaar registration process. Udyam Registration offers more benefits than Udyam Aadhaar and is fully integrated with government portals like GeM. It provides verified authentication as per the new MSME norms and a permanent identification number on the portal known as the Udyam Registration Number(URN). If you are an MSME, it is recommended that you register under the Udyam Registration process to avail the benefits provided by the government.