Udyog Aadhaar: Government's treat for small and medium businesses

CA Sagar Khubchandani , Last updated: 25 February 2017  
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MSMEs, you are the power house of the India’s economy. Feel proud of it. The government recognizes your importance and hence, promotes you, provides you enormous benefits. Udyog Aadhaar is a valuable present that the government has provided for small and medium businesses.

To register your business as SME (Small and Medium Enterprises), you are required to register under Udyog Aadhaar, which was earlier called MSME registration.

First, why do I need to register?

The Ministry of Micro, Small and Medium Enterprises (MSME) have been assigned a task to support, promote and regulate the MSMEs in the country. Financial and technical support is provided to the Indian entrepreneurs and small businesses, beside capacity building programs.

The following benefits are provided to the businesses by MSME departments:

  • Eligibility for the government schemes for funding like
    a) Loan without guarantee
    b) Easy loan
    c) Loan at concessional rate of interest
  • Financial support from the government to participate in the foreign expo
  • Various government subsidies
  • Priority sector lending schemes
  • Excise Exemption Scheme
  • Exemption under direct tax laws: Income Tax on SMEs have also been reduced to 25%.
  • Incentives and schemes laid down by respective states that include power tariff concessions, capital investment subsidies, tax concessions, etc.

Udyog Aadhaar is a great way to get these perks.

Information/Documents required

  1. Aadhaar Number: 12-digit Aadhaar number of the applicant is mandatory.
  2. Name of the owner: The name has to be exactly same as that mentioned in Aadhaar Card. If the name of the applicant is Pan Singh Tomar, and on Aadhaar, it is mentioned Pan S. Tomar, then, Pan S. Tomar will only be mentioned as the name.
  3. Social Category: Applicant’s caste: General/SC/ST/OBC is needed. For categories other than general, proof of belonging to that category is required.
  4. Name of Business: The name of the enterprise is required to be filled, by which his/her enterprise is known to the public and needed to provide legal documents for that.
    More than one business can also be registered with single Aadhaar number.
  5. Type of Business: You need to select the type of entity from the given options, which are:
    a) Proprietorship
    b) Partnership Firm
    c) Hindu Undivided Family
    d) Private Limited Company
    e) Cooperative Society
    f) Public Limited Company
    g) Self Help Group
    h) Others
  6. Postal Address: Address of place of business needs to be entered here, along with email and mobile number.
  7. Date of Commencement of business
  8. Previous Registration Details: Details of registration as MSME earlier, if any to be shared here.
  9. Bank Details: Bank account number and IFSC Code to be provided in this field.
  10. Major Activity: Major area of business activity: Manufacturing or Service
  11. NIC Code: NIC Code is National Industrial Classification (NIC) Code, which needs to be entered from NIC handbook.
  12. Number of persons employed in the business to be entered
  13. Amount of investment in plant and machinery to be entered
  14. DIC: Details of District Industry Centre nearest to the business, to be filled, if needed.

The author can also be reached at info@moneymji.com


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CA Sagar Khubchandani
(Chartered Accountant)
Category Others   Report

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Comments

10 December 2018 Imran

what is the procedure to avail benefit of udyog adhar for subsidized electricity after registering with udyog adhar.


28 February 2017 CA Pradeep Garg

All schemes are not properly drawn up sir, Since a business entity has to face a set of diverse business laws applicable to it, you have to make a comprehensive set of management rules, similarly banks have to frame comprehensive policy for each type of customers taking into consideration all the business laws applicable to them. Not only this even bank managers must be adequately trained to treat each customer as a whole entity rather than as a class. Moreover banks must conduct surveys of borrowers premises themselves along with auditors


27 February 2017 K.chandrasekaran

All schemes are properly drawn up but not all the public sector banks Managers take initiatives to promote them as they do not like to take any risks .As a result most of the benefits does not reach the MSMEs


26 February 2017 CA Sagar Khubchandani

Yes, trading, manufacturing and service concern can obtain the same. Criteria is that maximum investment in plant and machinery should not exceed Rs 10 crore for manufacturing concern and Rs 5 crore for service concern.


26 February 2017 Venkatesh Dangeti

Sir, can a trading organisation obtain udyog aadhaar?? Is it only for manufacturing units?? whether there is turnover limit?


25 February 2017 CA Sagar Khubchandani

Yes, that is a very valid point. Since every law has some loophole, it too can have that. The government may bring some amendments to plug in this over time.


25 February 2017 CA Pradeep Garg

Sir, good article. However the benefit of MSME is available only on the basis of "Investment in Plant & Machinery" excluding all other fixed assets if any. Moreover only invoice value excluding taxes is considered for the purpose and the maximum limit is Rs 10 crores. Therefore it may happen that a company having 5 factories each having plant machinery of 10 crores each may still get the benefit of small industry even after having gross turnover of 1000 crores. In absence of other related threshold limits of capital, turnover, tax liabilities, term loans, product range, industry & organization type etc, the whole object of protection n promotion of small scale industries ( the backbone of India) is taken away by large scale business houses and they are put to severe competition in open market.


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