Udyog Aadhar - Here’s all you need to know

. 7 min read
Udyog Aadhar - Here’s all you need to know

The establishment of the Ministry of Micro, Small, and Medium Enterprises (M/o MSMEs) points toward the economic importance of the MSME sector in the national economy. MSMEs generate income and jobs that have worked to bridge the gap between rich and poor. The Indian government has realised its role in reducing economic disparity. Hence, with the introduction of Udyog Aadhar, they have not only improved the state of MSMEs but also changed the economic landscape of India. So, if you are someone who is a little bit overwhelmed with the process of the Udyog Aadhar Certificate, fees, and registration. Keep reading!

What is UDYOG Aadhar?

Udyog Aadhar is a facility developed by the Indian government to smoothen the process of registration for businesses falling under the category of MSME. Earlier known as MSME registration, Udyog Aadhar is a certificate developed under the MSME Act, 2006. It identifies and provides a unique number combination to MSMEs.

The Indian government, to boost the economy, merged the former MSME registration with Udyog Aadhar registration. One of the primary reasons behind this initiative was that MSMEs contribute to the job market and are an expanding sector. One which is capable of diversifying itself and highly absorbent of both skilled and unskilled labor. With MSMEs modernisation and industrialisation of backward and rural areas were possible, thereby ensuring more equitable distribution of national income. Socioeconomic growth is yet another area that MSME promotes through its expansion.

In light of all this, the 2006 Micro, Small, and Medium Enterprises Development Act addressed the policy issues faced by MSMEs and aimed to facilitate the growth of the MSME sector. The act was the first effort toward the recognition of MSMEs as an enterprise. While the government has taken the initiative, it also realises the importance of the state government's role as a facilitator. Hence, the government has supplied state governments with M/o MSME, which aids the states in facilitating MSMEs.

Wooden small cubes with letter perk isolated on white background

Perks of UDYOG Aadhar

MSMEs that obtain a Udyog Aadhar certificate are entitled to certain benefits, which are listed below:

  • Bank loan up to INR 1 crore without mortgage/collateral
  • Special weightage when obtaining government tenders
  • 1% relaxation on the interest rate on bank overdraft (OD)
  • Electricity bills concession
  • Tax rebate
  • Exclusive 50% discounts on administration charges for trademark and patent
  • Constitution safeguards against payment delays from buyers
  • Speedy addressal of issues

The following are the other guaranteed perks associated with the Udyog Aadhar certificate:

  • SMEs can avail of octroi benefits
  • Reduces rate of interest on bank loans
  • Subsidies from NSIC and IPS and credit ratings
  • Reimbursement for the ISO certificate
  • Access to international business fairs and trade events
  • Exemption of excise, tax, and government tenders
  • Earmarking specific products for exclusive production by MSME and SSI
  • Special perks from states and union territories

UDYOG Aadhar Registration and Eligibility

While the Udyog Aadhar Certificate is a boon to the business sector, not everyone can avail of its benefits. It has strict eligibility criteria, as mentioned below:

Size of Enterprise




Approximately INR 25 lakhs investment in equipment 

Approximately INR 10 lakhs investment in equipment


Approximately INR 5 crores investment in equipment

Approximately INR 2 crores investment in equipment


Approximately INR 10 crores investment in equipment

Approximately INR 5 crores investment in equipment

Earlier, the process of MSME registration was time-taxing, inconvenient, and difficult. However, with Udyog Aadhar, one can easily apply for the certificate from the comfort of their home. The UAM (Udyog Aadhaar Memorandum) can be filled with a self-declaration alongside the details of the enterprise. There is no cost attached to the application of the Udyog Aadhar and can be availed for various enterprises.

Guidelines for Udyog Aadhar

There are certain guidelines that one needs to adhere to when filling out the form for the Udyog Aadhar Certificate.

  1. Aadhar number allotted to the applicant must be added to the appropriate field
  2. The applicant must ensure that his/her name filled in the form for Udyog Aadhar is a replica of his/her name in the Aadhar Card issued by UIDAI.
  3. After completion of the filling process, applicants must click on Validate Aadhar to initiate the online verification process. The applicant cannot go further until the Aadhar card is successfully verified. If there is some issue with a specific Aadhar Card or the applicant wants to add the Aadhar number and name of the owner, the applicant can click on the reset button.
  4. The applicant must specify the Social Category he/she belongs to. SC, ST, OBC applicants have to provide caste identity proofs to the appropriate authority.
  5. The applicant has to fill in the name of his/her enterprise. A single applicant can have more than one enterprise; hence, they can either apply for each of them one by one or for the same Aadhar Number as Enterprises 1, 2, and so on.
  6. The applicant needs to specify the type of organization for his/her enterprise from the drop-down, and the venture should be legally or government authorized.
  7. The applicant has to provide the complete postal address including state, district, pin code, mobile number, and email, to obtain the Udyog Aadhar Certificate.
  8. The applicant also needs to mention the date of establishment for his/her enterprise.
  9. The applicant also needs to provide information about previous registration. If the enterprise has already been issued with a valid EM-I/II by the respective GM (DIC) as per the MSMED Act 2006 or the SSI registration before the current act, then this number needs to be mentioned in the respective field.
  10. The applicant also needs to provide his/her bank details, one used for business transactions pertaining to the enterprise. Details like IFS code, branch and bank names are mandatory. IFSC code is mentioned on the passbook and cheque book of all banks.
  11. The applicant needs to select the type of Major Activity the enterprise is running. It can either be a manufacturing or a service enterprise.
  12. The applicant can choose from the National Industrial Classification—2008 (NIC) Code for the selected “Major Activity.”
  13. The applicant also needs to provide information about employees of the enterprise and their wages. Information regarding plant, machinery, and equipment needs to be submitted. The cost of pollution control, R&D, and industrial safety devices are excluded from the total investment in the enterprise. Only the original total amount of investment is taken into consideration.
  14. The applicant needs to provide the location of DIC in the appropriate field. This only happens when there are more than one DIC in a district.
  15. The applicant will get an acknowledgment number as soon as he/she clicks on the Submit button.
msme banner

Ending Notes

The previous system of EM-I/II form filling was a hefty 11-forms long process, making it a big hassle for MSMEs to get the benefits that they are entitled to presently with the Udyog Aadhar certificate. This has resulted in a substantial increase in the number of registrations from 21,96,902 in 2007–15 to 68,06,714 presently. With times getting grimmer, especially for small-scale businesses, we’ve prepared this article, through which you can get a basic idea about the registration process and benefits of Udyog Aadhar.

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Q. How many Udyog Aadhar certificates are issued to an enterprise?

Ans. Only one Udyog Aadhar certificate can be issued to an enterprise. In case, an applicant has more than one enterprise, then each of them would need to be issued a different Udyog Aadhar or the applicant would have to specify each of them as Enterprises 1, 2, and so on, for the single Udyog Aadhar.

Q. Who prepares the NIC Codes?

Ans. The NIC codes are prepared by the Central Statistics Office (CSO), which falls under the Ministry of Statistics and Program Implementation, Government of India.

Q. How can one get a Udyog Aadhar certificate easily?

Ans. One can get a Udyog Aadhar certificate easily by applying online on UdyogAadhar.gov.in or downloading the application from the web.

Q. What is Udyog Aadhar Memorandum and why is it important?

Ans. The Udyog Aadhar Memorandum is a single-page registration form in a self-declaration format. It offers an easy way for MSMEs to declare their existence, bank details, owners’ details, etc. Obtaining Udyog Aadhar Memorandum would ensure access to several services offered by ministries and governmental organisations.

Q. What is an Entrepreneurs Memorandum?

Ans. Entrepreneurs Memorandum comprises two forms that need to be filed for existing and prospective enterprises. The first one is for prospective enterprises and the second one is for existing enterprises.