To simplify the registration process for MSMEs on the government site, the Indian government has introduced Udyam registration (UR) as a replacement for the existing Udyog Aadhar technique. This initiative enables the quick and easy incorporation of new businesses in India without the need for a lengthy procedure.
The registration process has been significantly improved and streamlined. Previously, applicants were required to submit extensive documentation across various categories, resulting in a cumbersome experience. However, with this new procedure, individuals can now register MSME through a single window, eliminating the need for multiple documents or paperwork. In this article, we will delve into the details of Udyam Vs Udyog Aadhar and explore their respective benefits.
MSME – Udyog Aadhar (UA)
The Ministry of Micro, Small, and Medium Enterprises implemented Udyog Aadhar in September 2015. It was also known as the Udyog Aadhar Memorandum (UAM). The Udyog Aadhar programme aimed to provide MSMEs with a special identification number, enabling them to access various incentives offered by the government, such as tax exemptions and subsidies. Previously, MSME registration required the submission of both an Entrepreneur Memorandum-I (EM-I) and an Entrepreneur Memorandum-II (EM-II). However, Udyog Aadhar simplified the registration process into a single step. MSMEs were required to provide their PAN number, bank account information, and other relevant details to obtain Udyog Aadhar. While Udyog Aadhar made the registration procedure easier, it still took a considerable amount of time.
Benefits of Udyog Aadhar
To simplify the process of incorporating Small Scale Industries (SSI) or Micro, Small, and Medium Enterprises (MSMEs), the Udyog Aadhar was established. Organizations that hold a Udyog Aadhar Certificate can avail themselves of various government initiatives, subsidies, and expedited loan approvals, among other benefits. To take advantage of Udyog Aadhar registration, SSIs or MSMEs need to transition to Udyam Registration. If this transition is not made, the companies are required to re-register using the Udyam Registration Portal.
MSME – Udyam Registration (UR)
On July 1st, 2020, the Ministry of MSME, Government of India, implemented a new method for Udyam Registration. This initiative announced through S.O. 2119(E) on June 26th, 2020, aims to streamline and enhance the registration process for MSMEs. It has successfully achieved this goal. The Udyam Registration now implements a self-declaration process, enabling businesses to register directly without relying on intermediaries. Through a single website, MSMEs can obtain their Udyam Registration number, which grants them access to a range of government subsidies. In comparison to Udyog Aadhar, Udyam offers numerous additional benefits. While Udyog Aadhar and Udyam differ significantly, each of these differences represents an improvement over the previous system.
Benefits of Udyam Registration
Udyam registration provides a variety of benefits to MSE businesses. These include quick dispute resolution, tax deductions, protection against buyer payment delays, easy bank loans without the need for collateral mortgages, allowances on electricity bills, preferential treatment for government tenders, a 1% interest rate exemption on bank overdrafts, and a special fifty per cent reduction on government trademark and patent fees.
When filing for Udyam Registration online through the Udyam Registration Portal as an MSME, there is no need to upload any documents, papers, certificates, or other forms of verification. Presently, the Indian government has not made MSME registration mandatory. However, it is advantageous due to the wide range of benefits it offers in terms of taxation, business setup, credit options, loans, and more.
Udyam Registration (UR) Vs Udyog Aadhar (UA)
- The entire process of registering your business has become inexpensive as a result of Udyam registration. There is no documentation required to do this.
- The Udyam registration gateway is fully registered and connected now. However, Udyog Aadhar does not have any connection with the Gem site or any other government-run portal.
- To complete the Udyam registration process, the only document required is the applicant’s Aadhar card. However, registering with Udyog Aadhar requires both an Aadhar Card and a PAN Card.
- Udyam registration form that requests information such as GST, Income Tax, etc. But Udyog Aadhar registration is compact and short.
- While registering for Udyam Registration, it is necessary to have an Aadhar card linked to an active mobile number. However, it is possible to apply for Udyog Aadhar without having an Aadhar Mobile Connectivity.
- An individual holding an Aadhar card can register only one company through Udyam registration. However, Udyog Aadhar allows the registration of multiple companies with just one Aadhar.
- The new Udyam registration procedure is quite simple and allows for minimal errors. However, the earlier Udyog Aadhar process lacked clarity, leading to errors and subsequent rejection of the certificate.
Making a self-declaration using the Udyam registration form requires providing information about your business details, financial particulars, and your Aadhar as the owner. You can conveniently complete this form on the Udyam registration portal using your laptop, mobile device, or any other device, without incurring any administration charges. Once you submit the form, you will receive an Udyam certificate sent to the email address you provided. This certificate will include a special Udyam Registration Number (URN) assigned to your business, which serves as your unique ID for accessing various government initiatives supporting MSMEs.
Fortunately, the Udyam registration process has been recently developed and improved, addressing several past shortcomings that caused difficulties for applicants.
CONCLUSION
The new MSMEs support scheme in India, known as Udyam Registration, has replaced Udyog Aadhar. This article highlights udyam vs udyog aadhar. These two systems vary significantly from each other. However, entering the required forms and information can be a time-consuming and tiring aspect of the registration process. At Taxxinn, our goal is to simplify the process of obtaining an MSME certificate by providing all the necessary legal and professional requirements to companies and individuals.
Related Reads:
Is Udyog Aadhar Compulsory for MSME? Importance of Udyog Aadhar Registration.
Complete List of Legal Requirements Before Starting Your Company.