Udyam registration has become essential for businesses to get government incentives, easy financing, market credibility, and even to apply for business loans. The registration not only makes it easy to obtain formal MSME status but also unlocks many financing privileges.

In this blog, we will understand how to get the Udyam ID and key pointers for a faster process.

Why is Udyam Registration Essential?

Udyam is a government registration system for registering Micro, Small, and Medium Enterprises (MSMEs) in India. It was introduced in July 2020 as a replacement for the previous Udyog Aadhaar system to streamline and digitise the process of registering MSMEs.

Udyam Registration offers a unique, permanent identification number to businesses. The certificate qualifies them to receive a number of government incentives, including easier access to loans, subsidies, and protections under MSME laws.

• Your business is officially recognised by the Indian government as an MSME when you register with Udyam.
• Businesses can apply for an MSME loan, provided they have a valid Udyam certificate.
• It facilitates the acquisition of operating cash, financing for machines, or growth funding through simpler approval procedures.
• It acts as evidence of your business’s legal recognition when interacting with banks, government tenders, and suppliers.

The registration certificate also qualifies for MSME loans. With Udyam for MSME loans, small businesses become eligible for priority sector lending and government-backed credit guarantees.

Step-by-Step Process for Udyam Registration

Step-by-Step Process for Udyam Registration

Here is how to get a Udyam ID online in a few simple steps:

1. Visit Udyam Registration Portal: You must start by first visiting the official Udyam Registration Portal: udyamregistration.gov.in.
2. Head to Registration Page: Click on register ‘For New Entrepreneurs who are not Registered yet as MSME or those with EM-II’ under the MSME-Udyam registration process.
3. Provide Aadhaar Details: Next, enter your ‘Aadhaar Number’ and ‘Entrepreneur Name’. Ensure that your Aadhaar is linked with your mobile number for OTP verification. Before proceeding, agree to the terms and conditions and then click on Validate & Generate OTP.
4. Verify OTP: You will receive an OTP on your mobile number linked to your Aadhaar card. Type in the OTP and press the Validate button.
5. Verify PAN: After the Aadhaar is verified, go to the PAN verification page. Select the ‘Type of Organisation’, PAN number, and press the Validate button. Also, state whether you have submitted the ITR last year and whether you have a GSTIN.
6. Enter the Necessary Details: The Udyam registration application form will appear on your screen. Enter all the necessary information:
   1. Complete name of the entrepreneur
   1. Name of the enterprise
   1. Location of the plant/unit
   1. Address of the enterprise
   1. Status of the enterprise
   1. Bank details
   1. Activity of the unit
   1. NIC code
   1. Number of persons employed
7. Submit Additional Details: Enter the following Details. Click the Submit button and get the Final OTP.
   1. Plant and machinery details and turnover details.
   1. Select the declaration.
8. Get the Udyam ID: Enter the last OTP obtained and fill in the form. Finally, the Udyam e-registration certificate will be sent to your email along with your Udyam ID.

Udyam Certificate Documents

Here are the Udyam certificate documents necessary to process the application:

Aadhaar Number	Proprietor, partner, Karta, or authorized signatory, based on the type of business
PAN Card	Business owner
Business Registration Certificate	Partnership deed of partnerships, certificate of incorporation of companies, or registration certificate of proprietorships
Business Address Proof	Electricity bill, telephone bill, or property tax receipt in the name of the business
Bank Account Details	Bank passbook, cancelled cheque, or bank statement of business account with account number and IFSC code
GSTIN Details	If applicable

Updating and Renewal Registration for Udyam

You don’t need to renew your Udyam registration every year because it is valid for life. However, updates are necessary in certain cases: a change in your business’s annual turnover, number of employees, and business type.

Common Mistakes to Avoid in Udyam Registration

Despite the process’s simplicity, several business owners make the following errors, which you must avoid:

• Wrong Aadhaar Details: Verification failures and delays most often occur due to mismatches in Aadhaar details, name, or date of birth. This is why you must always enter accurate details on the Aadhaar card.
• Incorrect Investment or Turnover Information: Reporting incorrect investment amounts or turnover can result in misclassification of the enterprise, which may influence the schemes or benefits eligibility.
• Business Type or NIC Code: Select the right legal form and the business activity code to be properly classified.
• Errors in PAN or GST Details: Check PAN and GST numbers; any discrepancy or wrong entry can result in rejection of the application.
• Failure to Update Business Details: Lack of updated information, such as business address, turnover, or investment, will lead to old records and may cause compliance problems.

In India, Udyam registration is currently the foundation for official MSME status. It also provides MSMEs with easier access to business loans, subsidies, and priority sector benefits. All these allow you to grow your business and compete effectively.

If you have a Udyam registration and want to apply for a DMI Finance business loan, then click here. Even if you do not have a Udyam registration, we can assist you in the loan application to get a Udyam ID.

Frequently Asked Questions (FAQs)

1. How does Udyog Aadhaar vary from Udyam registration?

Udyog registration integrates the PAN and GST databases for automatic verification, whereas Udyog Aadhaar was the earlier system that lacked integration with government portals.

2. Can I use a single Aadhaar to register more than one business?

Yes. You can register several businesses using the same Aadhaar number if you own more than one. Nonetheless, every company will receive a distinct Udyam ID and certificate.

3. How long is the Udyam certificate valid for?

Unlike previous MSME registrations that needed to be renewed every few years, the Udyam certificate is valid for life.

4. Are all Indian small enterprises required to register for Udyam?

No. Nonetheless, it is strongly advised that you will not be eligible for MSME loans, subsidies, or tender advantages if you are not registered with Udyam.

5. Is it necessary for foreign-owned companies doing business in India to register with Udyam?

Yes. A company can apply for Udyam if it is registered in India and meets the MSME criteria (based on turnover and plant/machinery investment).  As long as the operations are conducted in India, Udyam registration is feasible even if the parent business is located outside.

6. How should I proceed if my Udyam certificate is lost?

With your Udyam ID and cellphone number, you can download your certificate from the Udyam portal as many times as you’d like.

7. How long does it take for banks and NBFCs to confirm a Udyam account?

Using your Udyam ID, financial institutions may promptly validate your Udyam registration online. Verification often takes a few minutes because the certificate is immediately connected to Aadhaar and PAN.

8. What occurs if my business’s turnover surpasses the MSME threshold?

You must update your information on the Udyam site if your turnover increases and you are no longer considered an MSME.

9. Do sole proprietorships require Udyam registration as well?

Yes. Udyam registration is applicable to all business structures, including partnerships, sole proprietorships, limited liability companies, and LLPs.

10. After finishing my Udyam registration, can I make changes?

Yes. You can update the company name, personnel information, turnover, or contact details by using the “Update” option on the Udyam site.