Why is it Important for Companies/MSMEs to Update Their Old Udyog Aadhaar?
Updating from Udyog Aadhaar to Udyam Registration is essential for MSMEs in India to access government schemes and subsidies. The previous Udyog Aadhaar system had limitations regarding data accuracy and verification. Consequently, in 2020, the government introduced Udyam Registration—a more robust framework that links businesses directly to government databases through PAN and GST details. This ensures seamless verification and significantly reduces fraudulent claims.
Migrating to Udyam is crucial for MSMEs to access loans, subsidies, and government incentives. The Udyam platform introduces updated investment and turnover-based categorizations, offering tailored support while enhancing business credibility. This mandatory shift simplifies compliance through a fully digital process, making it easier for MSMEs to secure financing, align with evolving regulations, and participate in government tenders efficiently.
In a competitive market, staying updated ensures that MSMEs can leverage the full range of benefits designed to support their growth, helping them thrive in today’s dynamic economy.
Step-by-Step Guide: Migrating from Udyog Aadhaar to Udyam Registration
Migrating from Udyog Aadhaar Memorandum (UAM) to Udyam Registration is a straightforward process. Here’s how to do it:
- Visit the Udyam Registration Portal: Go to the official website and scroll to the bottom. Click on the link: “For those already having registration as UAM – Migrate to Udyam Registration.”
- Enter Udyog Aadhaar Details: Input your 12-digit Udyog Aadhaar number (UAM).
- OTP Verification: Verify your identity using the OTP sent to your registered mobile number or email address.
- Fill the Form: Update your Personal Information and Company Information. Ensure your PAN and GSTIN details are accurate, as these are now mandatory for most categories.
- Submit the Application: Once all information is verified, submit the form to generate your new registration.
After a successful migration, you can download your new Udyam Certificate. This document replaces the Udyog Aadhaar and enhances your business’s credibility under the latest MSME guidelines.
Comparison: Udyog Aadhaar vs. Udyam Registration
| Feature | Udyog Aadhaar (Old) | Udyam Registration (New) |
| Verification | Self-declaration (Low verification) | Linked to PAN & GST (High verification) |
| Registration Process | Manual entry of financial data | Automatic data pull from ITR/GST portals |
| Validity | No longer valid for new benefits | Mandatory for all MSME benefits |
| Integration | Standalone | Integrated with GeM (Government e-Marketplace) |
Here are some benefits of udyam registration
Access to Government Schemes/Subsidies:- Udyam registration provides easy access to government schemes and subsidies. The government comes with so many schemes that subsidize small businesses; these include credit-linked capital subsidies, skill development programs, export promotion assistance, and reimbursement for ISO certification and patent registration. For access to those schemes, businesses must have an Udyam Certificate.
Official Recognition of Business:- Udyam registration provides official recognition for businesses that enhances the credibility of the business for customers as well as investors. That recognition is going to help them in collaboration with other businesses.
Loan with Less Collateral and Low Interest Rate:- Udyam registration provides easy access to finance. Udyam-certified businesses find it easy to secure a loan from banks and other financial institutions. Generally, that loan has lower interest rates and also requires very little collateral. That allows them to manage working capital and expand their business.
Protection Against Delayed Payment:- Udyam registration protects small businesses from delayed payments by larger businesses. The government has come up with a mechanism to protect MSMEs from delayed payments by larger businesses. That helps MSMEs to have good financial stability and maintain better cash flow.
Preference in Government Tenders:- Small businesses registered under Udyam Certification are given preference in government tenders. That makes it easier to get contracts from platforms like E-Marketplace. That can help them to secure a valuable contract and boost their revenue.
Tax Benefits and Exemptions:- MSMEs registered with Udyam can carry forward (MAT) Minimum Alternate Tax for up to 15 years (earlier it was only 10 years) and get rebates on direct taxes. That will reduce the operational cost of the business.
Rebate from State Government:- Small business registration with Udyam gives access to rebates by both the Central Government and State Government. Those rebates are going to save more on setting up the business. There are some state governments offering subsidies on electricity bills for Udyam registered businesses; that is going to help to reduce operational costs.
Simplified Tax and Compliance:- Udyam registration makes tax filing and regulatory compliance easy, especially when databases integrate with GST and PAN. Being a registered MSME helps in financial tracking, better organization, and also better coordination with tax consultants.
Frequently Asked Questions (FAQs)
- What happens if MSME owners don’t migrate to Udyam Registration? If you do not migrate, your business will no longer qualify for government benefits such as interest rate subsidies, priority sector lending, or legal protection against delayed payments.
- Is there a fee for migrating to Udyam Registration? No. The migration process is entirely free of cost. The government does not charge any fee for registration on the official portal.
- Will my existing Udyog Aadhaar number remain valid? No. Once you migrate, your business will be identified by a new Udyam Registration Number. The old UAM number will be phased out for all official purposes.
- Can I update my business details during the migration? Yes. The migration process allows you to update or correct vital information such as bank details, investment figures, and business activities.
- What is the role of Aadhaar in Udyam Registration? Aadhaar is used to authenticate the identity of the proprietor, partner, or director, ensuring the registration is secure and linked to a verified individual.
Conclusion
Migrating to Udyam Registration is more than just an administrative task; it is a strategic step toward future-proofing your business. With over 4.91 crore MSMEs already registered, those who remain on the old system risk falling behind. Ensure your business is “future-ready” by completing your migration today.
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