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What is Udyog Aadhar Memorandum?

Ashish M. Shaji

| Updated: Mar 02, 2021 | Category: MSME

What is Udyog Aadhar Memorandum?

The Ministry of Micro, Medium, and Small Enterprises notified about the Udyog Aadhar Memorandum under the MSMED Act of 2006. This was introduced to promote the ease of doing business for MSMEs. In this article, we shall look at its main features and other details of it.

Udyog Aadhar Memorandum- Meaning

It is a one page registration form which has a self-declaration form under which MSME self-certifies its existence, details of bank account, and other minimum information.

Existing enterprises that have filed Entrepreneurship Memorandum I or Entrepreneurship Memorandum II, or both or the holders of small scale industry registration don’t have to file the Udyog Aadhar Memorandum. However, if they wish to do so then they can also file. There is no restriction on filing more than one Udyog Aadhaar Memorandum using a similar Aadhar number.

What is the need for Udyog Aadhar Memorandum?

India has the largest number of MSMEs in the world. It is estimated that around 95% of the total industrial units come under the purview of MSMEs. Thus, comprising of more than 42.5 million industries. However, only 36 million of these units are under registration.

Considering the situation, the government came up with schemes to aid MSMEs that were expected to boost the Indian economy. Most of the small industries could not avail benefits due to the lengthy process of registration. Therefore the memorandum was introduced to simplify the tedious process.

Key Features of Udyog Aadhar Memorandum

The main features are discussed below:

Key Features of Udyog Aadhar Memorandum
  • The registration process is online and user friendly;
  • It can be filed on the basis of self-declaration;
  • No documentation needed;
  • No fee required for filing; and
  • File more than one Udyog Aadhaar Memorandum using a similar Aadhar number.

Procedure for filing Udyog Aadhar Memorandum (UAM)

MSMEs shall file UAM in Form I in the following manner:

  • It shall be filed online on the website of the MSMEs, Government of India.
  • Every micro, small and medium enterprise engaged in the manufacturing of goods or rendering of services with total investment in plant and machinery below the limit mentioned in section 7 of the MSMED Act should file the memorandum.
  • The memorandum should be filed only when the unit is established and after obtaining all regulatory approvals and starting commercial operations.
  • Any number of activities, including manufacturing and or service, can be specified in the memorandum.
  •  The proprietor, in case of proprietorship firm, managing partner in case of partnership firm and a karta in case of HUF is required to provide Aadhaar number in the memorandum.
  • If it’s a Company, LLP or a co-operative society, or a society or a trust, PAN of the organization with the Aadhaar number of the authorized signatory should be mentioned in the memorandum.
  • A Onetime password for verification of fresh memorandum and amending of the existing memorandum will be sent on the mobile phone of the applicant and the applicant should enter the OTP in the form.
  • The memorandum should be filed on self-certification basis and there is no requirement of any additional documentation that should be uploaded.

What are the benefits of Udyog Aadhar Registration?

The benefits of registration are as follows:

  • It eases the tedious process;
  • It is cost free,  and has a paperless online registration that can be availed easily;
  • UAM has benefits of low subsidy interest rates, easy loans, and loans without collateral for an industry that qualifies and registers under MSME;
  • An applicant can use it for obtaining other eligible government subsidies; and
  • The UAM looks to classify MSMEs and provide information regarding various government schemes.

Guidelines for filing Online Udyog Aadhar Form

  • Aadhaar Number-

12 digit Aadhaar number has to be filed in the appropriate field.

  • Owner’s name-

The applicant is should enter his or her name as mentioned in the Aadhaar card. In case the name doesn’t match with the aadhaar number, the form can’t be filled further.

  • Name of enterprise-

The applicant shall enter the name by which his/her enterprise is known. An applicant may have more than one enterprises doing business and each one can be registered for a separate Udyog aadhaar.

  • Type of Organization-

The applicant can choose the type of organization for their enterprise. The applicant should ensure that he or she is authorized by the legal entity to fill this online form.

  • PAN Number-

The applicant should provide PAN number if it’s a Co-operative, private limited, public limited, or an LLP.

  • Plant Location-

By clicking on add plant option, the applicant may add multiple plant location.

  • Commencement date-

The date when the business entity began its operations may be entered in the relevant field.

  • Bank details-

The applicant should provide their bank detail that is used to run the enterprise in the appropriate place.

  • Major activity-

The major activity, whether manufacturing or service, should be selected by the enterprise for Udyog Aadhaar. In case an enterprise does both type of activities and if major work involves in manufacturing, then select major activity as manufacturing and vice versa.

  • Investment in plant and machinery/ equipment-

At the time of computing total investment, the original investment is to be taken into account, excluding the pollution control, research and development, industrial safety devices, and other items as may be specified by RBI notification.

Online verification of Udyog Aadhar Memorandum

Guidelines for verifying UAM online:

  • Enter 12 digit UAM number;
  • Enter verification code as provided in captcha; and
  • Click on verify button.

Conclusion

It is worth mentioning that even though supporting documents are not required for Udyog Aadhar Memorandum, any central or state authority can ask for specific documentation as an evidence of information in the UAM form. For further information on UAM or relating to Udyog Aadhar Registration or related queries, feel free to contact Enterslice.

Read our article: Benefits of MSME Registration in India

Ashish M. Shaji

Ashish M. Shaji has done his graduation in law (BA. LLB) from CCS University. He has keen interests in doing extensive research and writing on legal subjects especially on corporate law. He is a creative thinker and has a great interest in exploring legal subjects.

Business Plan Consultant


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