All about Guidelines for Filling MSME (Udyam) Registration

Udyog Aadhaar Registration Mandatory for Small Businesses

• Basically, Udyog Aadhaar was not legally mandatory but highly recommended. It provided official government recognition to MSMEs and enabled access to Subsidy schemes, Collateral-free credit, Government tenders, Tax and GST benefits, etc.
• From July 1, 2020, Udyog Aadhaar Registration is now replaced by Udyam Registration. Udyog Aadhaar was officially replaced by Udyam Registration, which is now mandatory for MSMEs to avail benefits such as Collateral-free loans under the Credit Guarantee Fund Scheme ; Interest subsidies; Public procurement preference and other government incentives etc Thus, all businesses should migrate to Udyam Registration to stay compliant and competitive.
• Overall, Udyam Registration represents a major step toward formalizing the MSME sector, enhancing credibility, and promoting ease of doing business in line with India’s Atmanirbhar Bharat initiative.
• The transition from Udyog Aadhaar to Udyam Registration was introduced to make the MSME registration process more transparent, verified, and digitally integrated. Under the earlier Udyog Aadhaar system, registration was based purely on self-declaration, leading to issues such as Duplication of records; Inaccurate information, and Misuse of government incentives
• To resolve these issues, the Udyam Registration system was launched, integrating with key government databases like PAN and GSTIN for automatic verification. This ensures Authentic and verified MSME data ; Faster access to loans, subsidies, and schemes; Simplified, paperless, and fully online registration.

Objective Behind the Transition

Effective Date of Implementation : The Udyam Registration system officially came into effect on 1st July 2020. From this date All new MSME registrations must be done through the Udyam portal. Existing enterprises registered under Udyog Aadhaar were required to migrate to Udyam.

The initial migration deadline was 31st March 2021, later extended to enable more enterprises to complete the transition. The Udyam system is integrated with Income Tax Portal (for PAN verification) & GST Network (for turnover validation).  This integration allows real-time verification, reducing fraud and improving accuracy. Following benefit can be taken after registration Registering under Udyog Aadhaar provided several tangible benefits to small and medium enterprises, such as:

• • Access to collateral-free bank loans under MSME credit guarantee schemes
  • Eligibility for government subsidies (technology upgradation, capital investment, etc.)
  • Lower interest rates on bank loans
  • Preference in government tenders and procurement
  • Simplified approvals and registrations for other licenses
  • Income tax and GST benefits for eligible enterprises
  • Participation opportunities in trade fairs, export promotion, and skill programs

Although Udyog Aadhaar is discontinued, existing registrants should update their details under the Udyam portal to continue receiving these benefits.

Ministry Responsible for Udyam Registration

The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India, introduced and administers the Udyam Registration process. The Ministry’s objectives include Simplifying registration for MSMEs; Ensuring accurate verification through PAN and GST data; Facilitating access to financial, technical, and marketing support

Registered Udyam enterprises are eligible for Priority sector lending; Collateral-free loans under CGTMSE; Protection against delayed payments (under MSMED Act, 2006); Government subsidies and tender benefits. This reform aligns with the government’s goal to digitally empower the MSME sector and support sustainable growth.

Revised Classification of MSMEs (Turnover-Based)

The classification is dynamic and automatically updated based on the latest data fetched from the Income Tax and GST systems. This ensures Accurate enterprise categorization; Prevention of misreporting; Seamless access to government schemes based on verified credentials.

Category	Investment Limit	Turnover Limit
Micro Enterprise	Up to INR 1 crore	Up to INR 5 crore
Small Enterprise	Up to INR 10 crore	Up to INR 50 crore
Medium Enterprise	Up to INR 50 crore	Up to INR 250 crore

How to Register Your Business under Udyog Aadhaar

Udyog Aadhaar registration was a simple, paperless process designed to help MSMEs gain formal recognition. To register, applicants had to:

1. Visit the official Udyog Aadhaar portal.
2. Enter their 12-digit Aadhaar number and verify it through an OTP sent to the registered mobile number.
3. Fill in essential business details such as Name and type of organization; Business address and location of plant; Bank account information; NIC code (industry classification); Investment and turnover details
4. After submission, the Udyog Aadhaar Memorandum was generated instantly.

This self-declaration-based form made the process quick and convenient, especially for small entrepreneurs with limited resources. Udyog Aadhaar has now been replaced by Udyam Registration. The new Udyam system requires PAN and GSTIN for validation and is essential for MSME recognition and government benefits. For Udyam Registration  there is No registration fee was required.

Documents Required for Udyog Aadhaar Registration :

Udyog Aadhaar was known for its minimal documentation. The only mandatory document was the Aadhaar card of the applicant (business owner or promoter). Clints needed to provide:

• Aadhaar number (for identity verification)
• Name and type of business (Proprietorship, Partnership, etc.)
• Business address and contact details
• Bank account details
• NIC code (industry classification)
• Total number of employees
• Investment in plant and machinery

Everything was self-declared, and no physical documents had to be uploaded.
PAN and GSTIN were optional under Udyog Aadhaar, but are now mandatory under the Udyam system.

Modify / Update Udyog Aadhaar Details After Registration :

Udyog Aadhaar allowed easy online modification of registration details such as Business name; Address; Activity type; Investment details . Clints / professional could log in to the portal, choose “Update Udyog Aadhaar”, and make the necessary changes using Aadhaar authentication. However, since Udyog Aadhaar has now transitioned to Udyam Registration, MSMEs should migrate to the Udyam system. Udyam links directly with PAN and GST databases, ensuring:

• Accurate enterprise classification
• Automatic data validation
• Continued access to MSME schemes and subsidies

Keeping your business details updated under Udyam ensures compliance and uninterrupted access to government benefits.

MSME Mandatory Reporting –

Overview of MSME Classification

The Government of India introduced a new turnover-based classification for Micro, Small, and Medium Enterprises (MSMEs) in February 2018. Under this system, business turnover replaced investment in plant and machinery as the primary criterion for classification.

Originally, the classification under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 was based on investment limits. However, with evolving business needs and ease of doing business reforms, the government revised the criteria to focus on turnover, ensuring more accurate and flexible categorization. This Act applies to both the manufacturing and service sectors.

MSME Reporting Requirement under the Companies Act :

In accordance with the notification dated 22nd January 2019, every specified company  whether public or private  that receives goods or services from MSME suppliers and whose payments remain due for more than 45 days from the date of acceptance or deemed acceptance of goods or services, must comply with MSME reporting requirements.

Definition of Specified Company:  A company that Has outstanding payments to MSME suppliers exceeding 45 days, and Is required to file returns with the Ministry of Corporate Affairs (MCA) in MSME Form I.

MSME Form I – Filing Requirements :

(a) One-time Return: Every specified company had to file a one-time return in MSME Form I, disclosing details of all outstanding dues to MSMEs as on 22nd January 2019. & The due date for this one-time filing was 21st February 2019 (i.e., within 30 days of the notification). Initially, the form was not available on the MCA website at the time of notification.

(b) Half-Yearly Returns: After the one-time return, companies are required to file two half-yearly returns each financial year, providing details of MSME dues that remain outstanding for more than 45 days.

Return Period	Due Date for Filing
April to September	31st October
October to March	30th April

Each return must include The total amount of payments due to MSME suppliers, and The reasons for delay in payment (if applicable).

Objective of MSME Form I :

• The purpose of this reporting requirement is to Ensure timely payment to MSMEs by large companies, Improve transparency in business transactions, and Strengthen the financial discipline within the supply chain.
• Failure to comply with these filing requirements may attract penal provisions under the Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019 and relevant sections of the Companies Act, 2013.

Quick Access

• Print Udyam Certificate
• Apply MSME Registration
• Apply Udyam Registration