Udyam Registration vs. Old MSME Registration: What’s Changed?
The Udyam Registration process is now fully digital, enabling businesses to complete their registration in just a few minutes. Earlier, MSMEs had to go through a time-consuming

Micro, Small, and Medium Enterprises (MSMEs) play a crucial role in India’s economy, contributing significantly to employment and economic growth. Earlier, businesses had to register under the MSME Act, of 2006, which involved obtaining Udyog Aadhaar or an MSME registration certificate. However, in 2020, the Government of India introduced Udyam Registration, a simplified and more efficient system to replace the older MSME registration process.
In this article, we will explore the key differences between Udyam Registration and the Old MSME Registration, discussing what has changed, the benefits of the new system, and how businesses can transition smoothly.
What Was the Old MSME Registration Process?
Before Udyam Registration, businesses had to register under the MSME Act through a process called Udyog Aadhaar Memorandum (UAM). This system had several steps and required businesses to provide extensive documentation.
Key Features of the Old MSME Registration:
-
Udyog Aadhaar Number (UAN): A 12-digit number given after registration.
-
Multiple Registrations: Businesses had to register separately for each unit.
-
Manual Verification: The approval process involved physical document verification.
-
Categorization Based on Investment Only: Classification was based solely on investment in plant and machinery.
-
Limited Online Processing: The process involved both online and offline elements.
What is Udyam Registration?
To improve efficiency and transparency, the Government of India introduced Udyam Registration on July 1, 2020. This system is fully online and replaces the older MSME registration methods.
Key Features of Udyam Registration:
-
Single Registration: One registration covers all business units under the same entity.
-
Fully Online Process: No physical paperwork is required.
-
Auto-Verification: The system integrates with government databases for real-time verification.
-
Classification Based on Investment & Turnover: The business category is determined using both investment and annual turnover.
-
Linkage with PAN & GST: Integration with PAN (Permanent Account Number) and GST (Goods & Services Tax) ensures better compliance.
Key Changes and Their Impact
-
Registration Becomes Easier & Faster
The Udyam Registration process is now fully digital, enabling businesses to complete their registration in just a few minutes. Earlier, MSMEs had to go through a time-consuming process involving the submission of multiple physical documents, leading to delays and paperwork hassles. Now, businesses can register from the comfort of their homes or offices without the need for in-person visits, making the entire process seamless and hassle-free.
-
No Need for Multiple Registrations
In the past, businesses operating with multiple units had to register each unit separately, causing unnecessary complications and additional documentation. With Udyam Registration, a single registration is sufficient to cover all units operating under the same business name. This streamlining of the registration process saves time and effort while ensuring that all units receive the benefits associated with MSME registration.
-
Automated Verification Saves Time
Under the traditional system, businesses had to submit documents manually, which required human intervention for verification, often leading to extended delays. The new Udyam Registration system integrates with PAN and GST databases, allowing for automated verification. This automation ensures accuracy and significantly speeds up the approval process, allowing businesses to focus on growth rather than administrative work.
-
New Classification Criteria
Previously, businesses were classified under MSME categories based solely on their investment in machinery and equipment. The updated system now considers both investment and annual turnover, providing a more comprehensive and accurate classification. This ensures that businesses receive appropriate benefits and incentives tailored to their actual size and financial standing.
-
Lifetime Validity
Under the old MSME registration framework, businesses were required to renew their certificates periodically, adding to their administrative burden. The Udyam Registration certificate, however, comes with lifetime validity, eliminating the need for renewal. This change not only reduces paperwork but also allows businesses to operate smoothly without worrying about renewal deadlines.
How to Register for Udyam?
Businesses looking to register under Udyam can follow these simple steps:
-
Visit the Udyam Portal: Open the official Udyam Registration portal on your browser.
-
Fill in Business Details: Enter important details like your business name, type, address, and bank account information. Ensure accuracy in the data.
-
Review and Submit the Form: Go through the information to confirm it's correct. After reviewing, apply.
-
Pay the Registration Fee: Select your payment method and complete the payment for registration.
-
Receive OTP on Mobile: An OTP will be sent to the mobile number linked with your Aadhaar card.
-
Enter OTP: Input the OTP sent to your phone to verify your identity.
-
Complete Registration: Once your details are confirmed, your registration will be completed.
-
Receive Your Udyam Certificate: Once verified, your Udyam Registration certificate will be generated and sent directly to your email.
Benefits of Udyam Registration
Once registered, businesses can enjoy multiple benefits:
-
Easier Access to Loans: MSMEs get priority lending and lower interest rates.
-
Government Subsidies: Eligible for subsidies on electricity, patents, and trademark fees.
-
Protection from Late Payments: Under the MSME Act, buyers must pay within 45 days.
-
ISO Certification Reimbursement: Registered businesses can claim reimbursement for ISO certification expenses.
-
Easier Participation in Government Tenders: Preference in GeM (Government e-Marketplace) registration and public procurement.
Note: Now easily update udyam certificate through the udyam portal.
Conclusion
The transition from Old MSME Registration to Udyam Registration has made the process simpler, faster, and more transparent. With benefits like automatic verification, lifetime validity, and integration with government databases, Udyam Registration is a huge improvement over the previous system.
For businesses, especially MSMEs and startups, Udyam Registration is a must-have to access government support, loans, and subsidies.
What's Your Reaction?






