Difference Between Udyog Aadhaar and Udyam Aadhaar

Let’s look at the differences in a nutshell before going into detail about each of the systems and their distinguishing features:

What is Udyog Aadhaar?

Udyog Aadhaar was the earlier online registration system for businesses, introduced in 2015. The aim was to make it easier for businesses to function, achieved by providing MSMEs with a unique 12-digit Udyog Aadhaar Number (UAN). The registration helped these MSMEs access a range of benefits and subsidies through government schemes and initiatives.

The registration process involved enterprises self-declaring details, like investments and operations, through a form. On submission, the UAN and Udyog Aadhaar Memorandum (UAM) would be generated to serve as proof of registration.

However, the Udyog Aadhaar registration system is no longer valid and has been entirely replaced.

Also  Read: How To Get the Password Of e-Aadhaar?

What is Udyam Aadhaar?

Although popularly known as Udyam Aadhaar, the correct term is Udyam Registration. Launched on July 1, 2020, this is the current and official portal for enterprises to register as a Micro, Small, or Medium Enterprise (MSME) in India. Any other portal offering this service is fraudulent and should not be trusted.

The Udyam process is completely digital and paperless. It links with government databases like the Income Tax and GST networks to automatically verify an enterprise’s investment and turnover figures. This makes the registration seamless and more authentic. Upon completion, a permanent Udyam Registration Number (URN) and an e-certificate are issued to the organisation.

Difference in Registration

The biggest difference between the two lies in the registration procedure itself. The shift from Udyog to Udyam represents a move from a manual, declaration-based system to a fully automated and verified process.

The Udyog Aadhaar Process (The Old Method)

The previous method was a major improvement, but still had limitations rooted in its manual nature.

• Manual Data Entry: The process required applicants to fill out a single-page form known as the Udyog Aadhaar Memorandum (UAM). All details, including investment in plant & machinery, employee count, bank details, and business activity codes (NIC codes), had to be entered manually.
• Self-Certification Basis: There was no integrated mechanism to verify the accuracy of the financial data provided by the business owner. This reliance on declared information could sometimes lead to discrepancies.
• Document Uploads: In some cases, supporting documents had to be scanned and uploaded, making some paperwork necessary.

Also Read: What is Masked Aadhaar: Meaning & How to Download It

The Udyam Registration Process (The Current Method)

The current Udyam system is designed for transparency, accuracy, and ease of use, leveraging backend technology.

• Aadhaar-Based Initiation: The process is done end-to-end on the official Udyam Registration portal. It begins with the entrepreneur’s Aadhaar number, which is verified via an OTP to confirm the applicant’s identity.
• Automatic Data Fetching: This is the core of the new system. Once Aadhaar and PAN are verified, the portal automatically and securely pulls financial data from government sources. The company’s or proprietor’s Income Tax Return (ITR) filings provide investment details, while turnover details are fetched from the GST Identification Number (GSTIN) network.
• Minimal Manual Input: Because critical financial data is auto-populated, the business owner only needs to fill in a few basic details like bank information and employee count. This minimises errors and saves time.
• Paperless and Accessible: The registration is completely paperless and free of cost. Upon submission, a permanent Udyam Registration Number (URN) is generated instantly, and the e-certificate is emailed to the entrepreneur.
• Dynamic: The system is also dynamic, meaning it can update an enterprise’s status (from Micro to Small, for instance) based on future ITR and GST filings. This ensures information remains updated and accurate.

To Conclude

Remember that for MSMEs, Udyog Aadhaar is an older, non-functional system, while Udyam Registration is the current process for permanent registration. It is the valid Udyam Registration certificate that holds value today, without which MSMEs cannot conduct business formalities.

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Frequently Asked Questions

No. All enterprises with an old Udyog Aadhaar were required to re-register on the Udyam Registration portal. The Udyog Aadhaar is no longer valid.

It is not mandatory for all businesses. However, it is required if you wish to be officially classified as an MSME and avail of benefits like priority sector lending.

The Udyam Registration is permanent and does not have an expiry date or require renewal.

Yes. Wholesale and retail traders are now permitted to get Udyam Registration for the specific purpose of availing priority sector lending benefits.

Yes, the official portal has a provision to update key information such as your business address and activities after you have completed your initial registration.