MSME stands for Micro, Small, and Medium Enterprises. They are the backbone of Indian economy and an engine for the growth and development of our country. Therefore, the government has launched several schemes, subsidies, and incentives to promote MSMEs through the MSMED Act.
To avail these benefits, MSME registration is required. Nevertheless, many business owners are often confused between Udyog Aadhar registration and MSME registration. In this blog, we shall discuss the difference between the two.
What is Udyog Aadhar?
Most small business owners are curious to know what is Udyog Aadhar when they start their business. If you too are looking for an answer to the same question, then you are the right place. It is nothing but a government registration. It is provided as a recognition certificate along with a unique number. Notably, Udyog Aadhar certifies SMEs.
The main motive for launching this facility to let the small business owners get maximum benefits of the government schemes. To avail benefits, the owner, proprietor, or director of the business will have to provide their 12-digit Aadhar number. Plus, the business should also have an MSME registration certificate.
Why should you opt for Udyog Aadhar registration?
All types of businesses, be it Hindu Undivided Family, One Person Company, Proprietorship, Partnership Firm, Limited Company, Limited Liability Company, Private Limited Company, Production Company, Co-operative Societies, and any other association can apply for Udyog Aadhar registration.
But, being a business owner, you should know that there are a lot of criteria that you need to meet to be a micro, small, or medium enterprise.
So, before you apply for a Udyog Aadhar registration, you must check if your company can be classified as a micro, small, or medium enterprise under the eligibility criteria defined in the MSMED Act, 2006.
How to Edit Details entered in Udyog Aadhar?
If you have already applied for Udyog Aadhar number, then there is nothing for you to worry about. However, many times a business owner makes some mistakes while filling details during the Udyog Aadhar registration process.
Nevertheless, there is nothing for you to be disheartened about. You can follow a simple process to update information and rectify the changes.
Under the new provision launched by the Ministry of MSME, the applicants can edit the Udyog Aadhar Memorandum. They can easily change and update the information on their Udyog Aadhar by just a few clicks. To go to the link, click here.
All you have to do is just enter your Aadhar number, name, and the OTP received on your mobile phone to change the information.
Benefits of Udyog Aadhar Registration
Once you register for Udyog Aadhar, there are a number of advantages that you can enjoy. The best thing about the registration is that it is a quite simple and straightforward process. Besides, it does not even require a lot of paperwork.
The following are the benefits of Udyog Aadhar registration:
- Excise exemption
- Exemption under the indirect taxes
- Credit guarantee scheme
- Reduction in the fee for filing trademarks and patents
- After registration, your business will be eligible for availing various government schemes.
- Concession in the electricity bills
Steps To Do Udyog Aadhar Registration:
If you want to know how to do Udyog Aadhar registration, the following are the steps for the same:
- Notably, it is a one-page registration form where you need to self-declare your business existence, bank account details, Aadhar number, and other required details.
- There is no fee charged to fill the form so you don’t need to pay anything.
- On the submission of the form, Udyog Aadhar Acknowledgement will be generated and mailed to the email address you have entered.
- The Acknowledgement form will contain the unique UAN – Udyog Aadhar Number.
What is MSME Registration?
MSME registration is for the enterprises that fall under the MSME category. It is said that the MSME enterprises are the backbone of the Indian economy. They are the engine of economic growth and promote equitable development.
All MSMEs in India typically offer great employment opportunities and thus, are very important for the Indian economy. They play a vital role in the overall production and exports in India as well.
So, in order to promote them in their development, the MSMED Act facilitates many schemes, incentives, and subsidies for them. To obtain the MSME registration, you must own a proprietorship firm, LLP, partnership firm, Private Limited Company, or Public Limited Company.
Definition of MSMEs
The following is the MSME definition for the enterprises involved in the manufacturing, production, processing, and preservation of the goods:
- Micro Enterprises: a business with investment in plant and machinery, not more than Rs. 25 lakh.
- Small Enterprise: a business with investment in plant and machinery more than Rs. 25 lakh but less than Rs. 5 crores.
- Medium Enterprise: a business with investment in plant and machinery more than Rs. 5 crores but less than Rs. 10 crores.
For enterprises involved in the service sector, the following is the definition:
- Micro Enterprise: a business with investment in equipment, not more than Rs. 10 lakh.
- Small Enterprise: a business with investment in equipment more than Rs. 10 lakh but less than Rs. 2 crores.
- Medium Enterprise: a business with investment in equipment more than Rs. 2 crores but less than Rs. 5 crores.
Benefits of MSME Registration
The following are the benefits of getting MSME registration:
- You can avail the bank loans at cheaper interest rates as compared to the regular ones, ranging from 1 to 1.5%.
- MSMEs get various tax rebates.
- Get access to various government tenders specially opened for the MSME industries only.
- Access to easy business loans.
- After registration, patents can be done at reduced costs.
- Registered businesses are given preferences for government license and certification.
Steps To Do MSME Registration:
Significantly, MSME registration is not a compulsory registration under the MSMED Act. It provides MSMEs, a host of benefits and access to schemes and subsidies. Micro, Small, and Medium Enterprises, Proprietor firms, LLPs, and private and public limited companies can register themselves with the Act. The benefits of registration are as follows:
- Enterprise gets access to all central and state government schemes.
- Helps MSME to have an awareness of all the government schemes.
- Easy access to a business loan, subsidies, etc.
Therefore, to avail these benefits, one can register one’s business under the Act.
How to get MSME registration? Now, you must be wondering. The following are the steps for the same:
- Fill the application form available with relevant information, such as company name, GST number, registration number, etc.
- Next, enter your personal details, such as name, address, bank account details, PAN, etc. You also need to upload a photo.
- The official executive will process your application and review it. He will inform you in case there is any discrepancy. You can make the relevant changes.
- If everything goes well, you will get your MSME registration. Notably, you will get a virtual MSME registration certificate and not any hardcopy.
Difference Between MSME Registration & Udyog Aadhar Registration
Well, MSME registration and Udyog Aadhar Registration both are similar but different. Udyog Aadhar is just an easy way of acquiring MSME registration.
Udyog Aadhar Registration is an online method by which an MSME can get the 12-digit Udyog Aadhar Number. And, later go for MSME registration. Therefore, one can say that both are different. But Udyog Aadhar registration is the new way of getting MSME registration.