To access government schemes, loans, and market recognition, Udyam Registration has become essential. If you ask how to do Udyam Registration step by step, this article is a complete guide. The Ministry of Micro, Small & Medium Enterprises (MSME) introduced Udyam Registration to simplify how micro, small, and medium businesses register themselves and avail of multiple statutory benefits.
In this detailed guide, Biz Glows explains everything you need to know-Udyam Registration step by step—eligibility, documents, step-by-step registration, fees, benefits, mistakes to avoid, and post-registration compliance—so you can get your MSME certificate smoothly and build a legally recognized business in India.
ALSO READ: Prevent your business from legal battles. Read all insights beforehand!
What Is Udyam Registration?
Udyam Registration is the official government system for classifying and registering businesses under the MSME category. This registration replaced the older Udyog Aadhaar system to introduce transparency, automation, and ease of doing business.
Key Highlights
- It is 100% online, paperless, and Aadhaar-based.
- It requires no documents to be uploaded—only self-declaration.
- It is free of cost (there are no government fees).
- Your enterprise receives a permanent Udyam Registration Number (URN) and an e-certificate.
- Registration integrates with Income Tax and GST data to auto-determine your MSME category.
Who Can Apply for Udyam Registration?
Any enterprise engaged in manufacturing, production, processing, preservation, or service activities can apply.
Micro businesses are typically home-based, village-based, or small urban setups—examples include tiffin services, digital freelancers, stationery shops, tailoring units, handicrafts, dairy farms, and repair services.
Eligibility Based on Investment & Turnover
Under Udyam, a micro business is defined as:
- Investment in plant & machinery/equipment: Up to ₹1 crore
- Turnover: Up to ₹5 crore
Even if your business is very small, or you’re a solo freelancer, you can still apply as long as your activity qualifies as a business.
Why Udyam Registration step by step understanding Is Important for Micro Businesses
Businesses often ignore registration because they believe it is unnecessary or complicated. But Udyam Registration provides several benefits that can boost growth and profitability.
Major Advantages
1. Access to Government Loans & Subsidies
You can apply for:
- Mudra Loans
- CGTMSE collateral-free loans
- State-level subsidies
- Low-interest credit support
2. Priority in Government Tenders
Many tenders are reserved exclusively for MSMEs.
3. Protection Against Delayed Payments
Buyers must pay within 45 days; otherwise, they owe compound interest.
4. Cheaper Electricity and Utility Benefits
Some states provide electricity bill rebates for registered MSMEs.
5. ISO Certification Reimbursement
You can get your ISO certification cost reimbursed.
6. Easier Business Growth
Registration signals credibility to banks, suppliers, and customers.
Documents Required for Udyam Registration
Udyam Registration follows a self-declaration model. You do not have to upload any documents. However, you must have the following information handy:
Mandatory Information
- Aadhaar number of the proprietor
- PAN number of the business or proprietor
- GSTIN, if applicable
- Mobile number linked with Aadhaar
- Nature of business activity
- Number of employees
- Investment amount
- Annual turnover
For partnerships or companies, the Aadhaar of the managing partner or authorized signatory is required.
Step-by-Step Guide: How to Register a Micro Business Under Udyam
The registration process is straightforward. Below is a complete breakdown.
Step 1: Visit the Official Government Website
Go to the official portal:
https://udyamregistration.gov.in
Avoid third-party websites charging unnecessary fees. The government process is free.
Step 2: Select “For New Entrepreneurs Who Are Not Registered Yet as MSME”
This option is for businesses registering for the first time.
Step 3: Enter the Aadhaar Number
Provide your Aadhaar number and the name as per Aadhaar.
Authenticate using the OTP received on your registered mobile number.
If the business is:
- Proprietorship – Proprietor’s Aadhaar
- Partnership firm – Managing partner’s Aadhaar
- Company or LLP – Authorized director/partner’s Aadhaar
Step 4: Validate PAN Details
Enter your PAN. The system will automatically fetch information from the Income Tax database.
Step 5: Fill in Business Details
Provide:
- Business name
- Type of organization
- Location and address
- Bank account details
- Main activity (manufacturing or services)
- NIC code (industry classification)
- Number of employees
- Investment and turnover
NIC codes are important—they define what your business does. Choose the code closest to your business activity.
Step 6: Submit and Generate URN
After submitting the details, the system generates a Udyam Registration Number (URN) immediately.
Step 7: Receive the Udyam Certificate
The certificate is sent to your email within a few hours. It contains:
- Permanent URN
- QR code
- MSME classification
This certificate is valid for a lifetime—no renewal required.
Understanding Your MSME Classification After Registration
Your business will be categorized automatically based on:
- Investment in equipment/plant & machinery
- Annual turnover (linked to your ITR and GST return data)
Even if your turnover fluctuates, the government system automatically updates your classification.
Common Mistakes to Avoid During Udyam Registration
Many businesses make avoidable mistakes that lead to rejection or correction requests. Avoid these errors:
1. Using a Mobile Number Not Linked to Aadhaar
OTP verification will fail.
2. Selecting Wrong NIC Code
This affects your eligibility for schemes and industry benefits.
3. Entering Incorrect Turnover or Investment
The system cross-verifies with Income Tax and GST.
4. Using Multiple Udyam Registrations
A business must have only one Udyam Registration.
5. Expecting Approval Without PAN or GST Details
For businesses with GST liability, GSTIN is mandatory.
Is GST Mandatory for Udyam Registration?
GST is mandatory only if your business must register under GST law (based on turnover limits).
For micro businesses, small shopkeepers, self-employed individuals, freelancers, or home-based units that do not cross GST thresholds, GSTIN is not compulsory.
Cost of Udyam Registration
The government charges zero fees.
If any consultant or website charges hefty amounts, avoid them unless you need professional help.
Time Required for Udyam Registration
The process usually takes:
- 5–10 minutes for online form filling
- Immediate generation of URN
- A few hours to receive the certificate
How to Update or Modify Udyam Registration
You can update:
- Business name
- Address
- NIC codes
- Investment or turnover
- Employee count
- Contact details
Just log in using your Aadhaar and OTP, and edit information free of cost.
How to Download Your Udyam Certificate Later
If you lose or misplace your certificate:
- Visit the Udyam portal
- Go to “Print/Verify Certificate”
- Enter your URN and mobile number
- Receive OTP
- Download your certificate
Benefits of Udyam Registration for Micro Startups
Micro businesses often struggle with funding, recognition, and compliance. Udyam Registration helps overcome these challenges through:
1. Formal Recognition
Banks and suppliers take your business seriously when they see a government-issued MSME certificate.
2. Better Loan Eligibility
Micro enterprises often get faster approvals for:
- Working capital loans
- Term loans
- Equipment financing
3. Lower Interest Rates
Banks typically offer 1–1.5% lower interest rates for MSMEs.
4. Support for Women and Rural Entrepreneurs
Special credit programs and subsidies exist for women-led and rural businesses.
5. Easier Export Support
Registered MSMEs get assistance through export promotion councils.
Difference Between Udyam Registration and Shop Act License
Although both are important, they serve different purposes:
| Feature | Udyam Registration | Shop Act License |
| Issued By | MSME Ministry | State Government |
| Purpose | Classify as MSME | Legal permission to run a shop/business |
| Mandatory? | Not mandatory | Mandatory for most establishments |
| Validity | Lifetime | Renewal varies by state |
Many businesses require both to operate smoothly.
For businesses already GST-registered, entering GSTIN is mandatory.
Difference Between Udyog Aadhaar & Udyam Registration
| Feature | Udyog Aadhaar | Udyam Registration |
| Verification | Manual | Automated |
| Documents | Upload required earlier | No documents needed |
| Fees | Free | Free |
| Accuracy | Medium | High (linked to PAN+GST) |
| Validity | Valid only if migrated | Lifetime |
If you had a Udyog Aadhaar, you must migrate to Udyam.
Who Should Definitely Apply for Udyam Registration?
Udyam Registration is especially beneficial for:
- Micro manufacturing units
- Village and rural enterprises
- Freelancers and service providers
- Startups and home-based businesses
- Small shops and traders
- Digital marketing agencies
- Food processing units
- Repair and maintenance businesses
If your business can benefit from loans, subsidies, protection against late payments, or tenders, registering is a smart choice
Udyam Registration for Freelancers & Online Professionals
Even if you are:
- A content writer
- A graphic designer
- A software developer
- A photographer
- A digital marketer
…you can get a Udyam certificate.
This helps you receive payments professionally, apply for tenders, and get business loans.
Post-Registration Responsibilities of a Micro Business
Although Udyam Registration is simple, there are a few responsibilities:
1. File ITR Every Year
Your turnover classification depends on ITR data.
2. File GST Returns (If Applicable)
For businesses registered under GST.
3. Maintain Basic Records
Keep track of purchases, sales, and expenses.
Conclusion
For any micro business in India—whether rural, home-based, or urban—Udyam Registration is a crucial step toward building a recognized and growth-ready enterprise. The process is quick, free, and fully online, yet it unlocks powerful benefits such as easier access to loans, subsidies, legal protection, and government tenders.
If you want to establish credibility, secure financing, and grow your business with government support, registering under Udyam is one of the best decisions you can make. With this complete practical guide of Udyam Registration step by step, micro entrepreneurs can now navigate the entire process confidently and smoothly, ensuring their enterprise stands on a strong legal foundation.
