What is the Difference Between a Udyog Aadhar and an MSME/Udyam Registration?

The prior process for MSMEs' Udyam registration was Udyog Aadhar. The Udyog Aadhar portal requires a large number of documents to be supplied, as well as a lengthy registration process. Later, Udyam registration was introduced to replace Udyam and simply required Aadhar for authentication, removing the bother of having to upload various papers for verification. Let us try to comprehend both of them.

What is the Udyog Aadhar number?

• The prior mechanism for registering MSMEs was called Udyog Aadhar.

• Following registration, a unique identifying number known as the Udyog Aadhar Number is issued.

• The Ministry of Micro, Small, and Medium Enterprises issues Udyog Aadhar Numbers, which are 12-digit unique identity numbers.

• The Udyog Aadhar Memorandum (UAM) is a self-declaration form for authenticating Aadhar, bank account information, and other essential business information.

• UAM is filed only on the basis of self-declaration, with no supporting documentation necessary.

• After registration, the MSME receives a Udyog Aadhar certificate, which includes a unique identifying number known as UAM.

• The EM-I & EM-II, which were the old processes for registering a firm under MSME registration and needed a lot of paperwork to become qualified to benefit from MSME initiatives, were superseded by Udyog Aadhar.

• With the same Aadhar card, a person can register several UAMs.

• It is not linked to other government portals such as GeM, e-Samadhan, and so on.

• It can also be used without an Aadhar card.

What is the Udyam Registration Process?

• Udyam registration is a revolutionary online technique for registering small businesses.

• Udyam registration is entirely online, without the use of paper, and is based on self-declaration.

• For registration, all that is necessary is an Aadhar number or a PAN.

• Only one registration is allowed.

• If the business is participating in more than one activity, all of the other operations should be listed under one Udyam Registration number.

• By confirming the Aadhar/PAN data, the previous Udyog Aadhar can be renewed to the new Udyam Registration.

Udyog Aadhar & Udyam Aadhar Benefits

1. Collateral-free loans: Banks can provide MSMEs with collateral-free loans at lower interest rates. Guarantees are provided by the government for loans that do not have collateral security.

2. Subsidies on Capital Requirements: The government also offers cheap capital loans for day-to-day cash needs.

3. Preference in obtaining government tenders: Registration with Udyam makes it easier to obtain government tenders. MSMEs do not need to pay the Bid Security for participating in government tenders if they are registered with Udyam.

4. GeM (Government e-marketplace) access: The Udyam registration has access to GeM (Government e-marketplace). The GeM is an online and global marketplace where Indian government agencies can buy and sell goods and services.

5. e-Samadhan: The e-Samadhan is an online platform for MSMEs to file complaints about late payments. The technology ensures that issues over late payments are resolved quickly and effectively.

6. Overdraft facility: MSMEs are eligible for a 1% overdraft facility on overdraft loans. Overdraft loans are disbursed immediately by banks.

7. Reduction in trademark registration fees: MSMEs receive a 50% discount on trademark registration fees.

8. Patent fees for Udyam businesses have been decreased. The fees for renewing a patent have also been slashed by 60% for small businesses.

9. Technological Upgrading: The government has introduced technological up-gradation initiatives that encourage MSMEs to employ Energy Efficient Technologies (EET) in manufacturing operations to cut production costs and greenhouse gas emissions.

10. The government introduced the ZED program, which stands for Zero Defect and Zero Effect. This program was created to encourage MSMEs to produce things that are free of faults and have no negative environmental impact.

11. Subsidy based on NSIC performance and credit score: The NSIC is a credit rating methodology that evaluates a company's creditworthiness and capabilities. The government provides incentives for credit rating registration.

12. Marketing Assistance: The government also assists MSMEs with marketing by providing refunds for registration expenses for barcode registration.

Conclusion

The traditional MSME registration process was time-consuming and involved a lot of paperwork, which took up a lot of time for businesses that sought to register as MSME. To be eligible for the advantages granted by the government under various schemes, businesses had to fill out multiple forms. Udyam registration portal was created to make the documentation procedure for MSME registration easier. Udyog Aadhar was superseded by Udyam registration. The Udyam platform offers a variety of perks, including collateral-free loans, loan/capital subsidies, and e-Samadhan, all of which can be very useful to MSME-registered businesses.