Udyog Aadhaar and Udyam: Know the Difference

Introduction

The Government of India has undertaken various initiatives to boost the MSME sector in India, such as providing business loans at attractive business loan interest rates. One such initiative was Udyog Aadhaar.

As the pandemic adversely impacted small businesses, to help them recover, the Ministry of Micro, Small, and Medium Enterprises introduced a new process of MSME/Udyog Aadhaar registration known as Udyam Registration (Udyam) on July 1, 2020. Udyam Registration has now replaced Udyog Aadhaar.

Udyog Aadhaar

Udyog Aadhaar was a twelve-digit Unique Identification Number provided to MSMEs who got registered on the MSME portal. This registration helped MSMEs access different government schemes introduced to benefit them through projects like business loan at affordable business interest rates.

Udyam?

Udyam is an online registration portal introduced by the Government of India to benefit MSMEs. The earlier Udyog Aadhaar has been modified to create the updated version – Udyam as a more simplified MSME registration process for availing faster access to government schemes and programs. An enterprise that comes under the purview of the definition of an MSME can avail of Udyam Registration via the Udyam Registration portal and continue to benefit from this process, like getting business loans with attractive business interest rates.

Many people tend to get confused between the two processes – Udyog Aadhaar and Udyam.

These two initiatives differ in their features. The key differences between the two portals are as explained below.

Key Differences between Udyog Aadhaar and Udyam

ParticularsUdyog AadhaarUdyam Registration
AadhaarNumberMSME business owners could register more than one business under a single Aadhaar number.Only one enterprise can be registered under a single Aadhaar number.
PAN/GSTINNot mandatory while registering.Mandatory while registering.
PAN/GSTIN AuthenticationNot required.PAN/GSTIN authentication is mandatory on or after 01.04.2021.
Number of EmployeesRequired while registering.Number of employees to be entered while registering based on gender.
Link with Income Tax, PAN, and GSTFigures to be manually entered based on self-declaration.Details are to be entered per Income Tax returns filed for the previous year and GST.
Criteria for classification of MSMEsSeparate limits were specified for the MSME sector of manufacturing and service while classifying them.The same investment and annual turnover classification limit has been specified for both the manufacturing and service sector.
Registration CertificateOn registration, Udyog AadhaarMemorandum (UAM) was issued.On application, Udyam Registration Number is issued. Udyam Registration Certificate is issued only after verification.
Merger of PortalsNot applicable.The government e-Market (GeM) and TReDS have merged with the Udyam for smoothly conducting business and MSME facilitation.

Key Features of Udyam

  • Udyam Registration is mandatory for MSMEs in India.
  • Only one Udyam Registration under a single Aadhaar number is available for an enterprise.
  • An enterprise involved in manufacturing and service sectors will have its activities clubbed under a single Udyam Registration.
  • All enterprises registered under Udyog Aadhaar have to register under Udyam Registration before 31.03.2021 to avail of benefits.
  • Enterprise can access details via Udyam Registration Certificate, provided with a dynamic QR code.
  • PAN/GSTIN is mandatory for registration.
  • PAN/GSTIN validation is mandatory for registration on or after 01.04.2021.
  • Income tax, GST, and PAN departments are linked to verify company details.
  • Udyam Registration is valid till the enterprise exists, and no renewal is required.

Udyam Registration portal was created to upgrade the facilities provided by the tedious Udyog Aadhaar process. The portal provides a seamless, paperless registration process for MSMEs through a single window and enables business loans at affordable business interest rates.

Want a business loan?

Apart from the government lenders, other lenders also provide business loans at attractive business interest rates. Many lenders offer business loans to MSMEs at low business interest rates, which can be customized via their business loan EMI calculator provided for availing of flexible repayment options.