For an Indian business owner to register his business, he had to endure several procedures that were bureaucratic in nature. He also had to arrange for and go through countless paperwork, all of which was very hassling as well as time-consuming. But this was before the introduction of Udyog Aadhar. After the introduction of Udyog Aadhaar under the Government of India’s Micro, Small and Medium Enterprise Development Act, 2006 (MSMED), the process of registration for micro, small, and medium enterprises became a smooth flowing process that can be done online within minutes.
What is Udyog Aadhaar?
Udyog Aadhaar is a twelve digit unique number as an identification number the government provides for all small and medium businesses so that they can avail the benefits provided by the government. Just like the Aadhaar number is an identification for citizens of the country, a Udyog Aadhaar is an identification for micro, small and medium businesses and is therefore termed as MSME Registration (Micro, Small and Medium Enterprise Registration) too.
Who can apply for Udyog Aadhaar?
Often business owners feel that the Udyog Aadhaar is not for them or seem to harbor misconceptions regarding its applicability to their business. In reality, Udyog Aadhaar is for all types of micro, small and medium businesses and enterprises. All kinds of business entities including Hindu Undivided Family, Proprietorship, one-person company, Partnership Firm, production company, limited company, private limited company, limited liability partnership, co-operative societies or any association of persons or any other undertaking can apply for a Udyog Aadhaar.
However, there are certain eligibility criteria, one of which include that the business or enterprise must be classified as either a micro, small or medium enterprise in order to obtain the Udyog Aadhaar registration.
Objectives of Udyog Aadhaar
Now that it is clear that a business classified as an MSME can apply for Udyog Aadhaar, the next step would be to consider objectives of needing an identification number like the Udyog Aadhaar. Some of the objectives that the MSME department had in mind for businesses registering for Udyog Aadhaar are-
- It will promote the growth of micro, small and medium enterprises and businesses on a larger scale in order to effectively tackle the problems chiefly affecting the nation, that are poverty and unemployment.
- It will help the micro, small and medium enterprises to compete in an efficient manner with the international competition as well.
- will safeguard these small businesses from financial harassment and will protect their rights against the big industries.
- It will help the Government to make all the benefits and schemes available to the small industries effectively.
Ease of registration
Even though the objectives of registering a business seem appealing, several small traders often consider the process a complex one. Previously, the process involved filling out close to eleven forms and standing in queues for the submission. However, the present Udyog Aadhar Registration Process is simple. It involves filling out 2 forms and can be done entirely online, thus making it appealing to even small traders.
Benefits of Udyog Aadhaar for Businesses
Many business owners see the advantages of registering for a Udyog Aadhar, several small traders are still unsure of the benefits of applying for a Udyog Aadhaar registration. A Udyog Aadhaar can have several benefits for small traders such as –
- Businesses can be eligible for Government subsidies when the apply their micro, small or medium enterprise for a Udyog Aadhaar.
- They can open a current bank account in the name of their business without any hassles if they have a Udyog Aadhaar registration.
- Businesses who have Udyog Aadhaar can apply for the Government’s micro business loans and other schemes which are financially beneficial to the traders and their business.
- Apart from being eligible for loans, small business traders are even eligible for loans without the requirement for a guarantee, or can even get loans with a low-interest rate on it, apart from availing the benefit of easy loans.
- Businesses registering for a Udyog Aadhaar are even eligible for the credit guarantee scheme.
- Businesses can even get an exemption under direct tax laws if they have a Udyog Aadhaar registration.
- Concession in electricity bills, which is an attractive benefit, especially for traders, can also be availed upon registering under the Udyog Aadhaar scheme.
- Businesses, upon registering for Udyog Aadhaar, can even apply for the Government’s microloans and other schemes which can be beneficial to the business.
- Businesses can even avail reservation of products which are exclusively manufactured by micro, small, medium enterprises.
- The process of registration and application of licenses necessary for certain Businesses also becomes easier when they have registered under Udyog Aadhaar.
- Udyog Aadhaar registered businesses can even get assistance in the enhancement of the technology in business with marketing & capital support.
These are just some of the benefits which make Udyog Aadhaar registration an appealing option for traders.