Udyog Aadhaar

We assist in Obtaining Udyog Aadhaar Registration/MSME New registration, Amendment of existing registrations, etc.

The Micro, Small and Medium Enterprises Development Act, 2006 is an act for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises and for matters connected therewith or incidental thereto.

What are Micro, Small & Medium Enterprises?

In accordance with the provision of Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 the Micro, Small and Medium Enterprises (MSME) are classified in two Classes:

  1. Manufacturing Enterprises-The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
  2. Service Enterprises -The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment.

An enterprise for above purpose may be a proprietorship, partnership firm, hindu undivided family, association of persons, co-operative society, company or undertaking, by whatever name called.

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under

Manufacturing Sector
Enterprises Investment in Plant and Machinery
Micro Enterprises Does not exceed 25 lakh rupees
Small Enterprises More than 25 lakh rupees but does not exceed 5 crore rupees
Medium Enterprises More than 5 crore rupees but does not exceed 10 crore rupees
Service Sector
Enterprises Investment in Equipments
Micro Enterprises Does not exceed 10 lakh rupees
Small Enterprises More than 10 lakh rupees but does not exceed 2 crore rupees
Medium Enterprises More than 2 crore rupees but does not exceed 5 crore rupees

Requirement of MSMED/ Udyog Aadhaar Registration

Udyog Aadhaar used to be referred to as MSME registration earlier. Udyog Aadhaar is a 12-digit registration number issued by the Ministry of Micro, Small and Medium Enterprises (MSME) to the existing or new small and medium enterprisers in the country who have applied for registration.

As per section 8(1) of the Act, registration of micro or small enterprise (both) manufacturing and rendering of services) or a medium enterprise engaged in providing or rendering of services is optional. Upon qualifying for the criteria mentioned in the above table, enterprises can obtain Udyog Aadhaar Registration. Once Udyog Aadhaar registration is obtained, there is no requirement for renewal. The registration is valid for life-time.

As per the recommendations made by Kamath Committee, the Ministry of MSME, in consultation with the National Board of MSMEs and the Advisory Committee in this behalf, has prepared a one-page registration form that would constitute a self- declaration format under which the MSME will self-certify its existence, bank account details, promoter/owner’s Aadhaar details and other minimum basic information required. Based on the same, the MSMEs can be issued online, a unique identifier i.e. Udyog Aadhaar Number.

Benefits of registering under MSME Act/ Udyog Aadhaar

Units would normally get registered to avail some benefits, incentives or support given either by the Central or State Government

  1. Priority Lending to MSME at Concessional Interest Rates and collateral free:
    1. Bank’s lending to the Micro, Small and Medium enterprises as under is eligible to be reckoned for priority sector advances.
    2. Further Government through RBI made collateral-free credit available to all small and micro business sectors at concessional Interest Rates. This initiative guarantees funds to micro and small sector enterprises.
    3. As part of access to credit, Prime Minister announced 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans.
    4. The Ministry of MSME, Government of India and SIDBI set up the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) with a view to facilitate flow of credit to the MSE sector without the need for collaterals/ third party guarantees. The main objective of the scheme is that the lender should give importance to project viability and secure the credit facility purely on the primary security of the assets financed.
    5. In terms of RBI circular RPCD.SME&NFS.BC.No.79/06.02.31/2009-10 dated May 6, 2010, banks are mandated not to accept collateral security in the case of loans upto Rs 10 lakh extended to units in the MSE sector. Further, in terms of RBI circular RPCD/PLNFS/BC.No.39/06.02.80/2002-04 dated November 3, 2003, banks may, on the basis of good track record and financial position of MSE units, increase the limit of dispensation of collateral requirement for loans up to Rs.25 lakh with the approval of the appropriate authority.
    6. Credit rating is not mandatory but it is in the interest of the MSE borrowers to get their credit rating done as it would help in credit pricing of the loans taken by them from banks.
    7. A composite loan limit of Rs.1 crore can be sanctioned by banks to enable the MSME entrepreneurs to avail of their working capital and term loan requirement through Single Window in terms of RBI Master Direction on lending to the MSME sector dated July 24, 2017. All scheduled commercial banks were advised by RBI circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 on May 4, 2009 that the banks which have sanctioned term loan singly or jointly must also sanction working capital (WC) limit singly (or jointly, in the ratio of term loan) to avoid delay in commencement of commercial production thereby ensuring that there are no cases where term loan has been sanctioned and working capital facilities are yet to be sanctioned.
    8. Scheduled commercial banks have been advised in terms of RBI circular RPCD.SME&NFS. BC.No.102/06.04.01/2008-09 dated May 4, 2009 to put in place a non -discretionary One Time Settlement scheme duly approved by their Boards
  2. 50% Concessional on Government Fees for IPR Registrations namely Trademark and Patents is available to MSME Units
  3. Governments provide benefits to participate and special consideration in the international and national trade fairs which is organized by the MSME Department.
  4. MSME certified enterprise is preferred in the government tenders during the bid
  5. MSME Units can also avail subsidies for Industrial Promotion, Concession In Electricity Bill as per the Policy of State Governments, Reimbursement of Expenses incurred for ISO registration.
  6. MSME entities are Protected against delayed Payment from Customers:
    1. With the enactment of the Micro, Small and Medium Enterprises Development (MSMED), Act 2006, for the goods and services supplied by the MSEME units, payments have to be made by the buyers Within 45 Days
    2. Further the agreement between seller and buyer for Payments shall not exceed more than 45 days.
    3. If the buyer fails to make payment of the amount to the supplier, he shall be liable to pay compound interest with monthly rests to the supplier on the amount from the appointed day or, on the date agreed on, at three times of the Bank Rate notified by Reserve Bank.
    4. In case of dispute with regard to any amount due, a reference shall be made to the Micro and Small Enterprises Facilitation Council, constituted by the respective State Government.
    5. To take care of the payment obligations of large corporate borrowers to MSEs, banks have been advised that while sanctioning/renewing credit limits to their large corporate borrowers (i.e. borrowers enjoying working capital limits of Rs. 10 crore and above from the banking system), to fix separate sub-limits, within the overall limits, specifically for meeting payment obligations in respect of purchases from MSEs either on cash basis or on bill basis. Banks are also advised by RBI to closely monitor the operations in the sub-limits, particularly with reference to their corporate borrowers’ dues to MSE units by ascertaining periodically from their corporate borrowers, the extent of their dues to MSE suppliers and ensuring that the corporate pay off such dues before the ‘appointed day’ /agreed date by using the balance available in the sub-limit so created. In this regard the relevant RBI circular; IECD/5/08.12.01/2000-01 dated October 16, 2000(reiterated on May 30, 2003, vide circular No. IECD.No.20/08.12.01/2002-03 ) is issued by RBI. This deters delayed payment to MSME Units
    6. Further The penal interest paid by the buyer or payable by the buyer is not allowed as a expenditure under Section 23 of the Income Tax Act 1961. This deters delayed payment to MSME Units
    7. All Companies and entities who is required get their Books Audited are required to make necessary disclosure Under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 and Schedule III of the Companies Act 2013.This deters delayed payment to MSME Units.
    8. MCA vide notification “Specified Companies (Furnishing of Information about payment to micro and small enterprise suppliers) Order, 2019” dated 22nd January 2019, mandates that, all specified companies who buy goods or avail services from micro and small enterprises and whose payments to such suppliers have exceeded 45 days shall submit a half yearly return(e form MSME Form I) to the ministry of corporate affairs (MCA). This deters delayed payment to MSME Units

Documents required for Udyog Aadhaar Registration

  1. Aadhaar of the Owner/Promoter
  2. Category of applicant (General / Scheduled Tribe (ST)/ Scheduled Caste (SC) / Other Backward Castes (OBC))
  3. Name of the Entity and its Registered Address (Name of the; Company /Proprietorship Concern/Firm/LLP etc.)
  4. Type of organisation (Whether it is Company /Proprietorship Concern/Firm/LLP etc.)
  5. Date of Commencement/Incorporation of Business Entity
  6. Bank Details including Account number, Bank Name, Branch and IFSC Code
  7. Key Activity of the business –Whether Service or Manufacturing
  8. National Industrial Classification code whether activity of the applicant falls
  9. Number of Persons employed
  10. Total amount investment in terms of machinery and equipment by the business
  11. Contact Number, Communication Address and Email ID

We also offer other sorts of registration services as below:

  1. Registration under Karnataka Shops and Commercial Establishments Act 1961
  2. Professional Tax Registration
  3. Registration under Employee Provident Fund
  4. Registration under Employee State Insurance
  5. Import Export Code
  6. STPI or Non STPI Registration
  7. Trade License from BBMP
  8. APEDA Registration
  9. FSSAI