MSME registration is now called Udyam Registration. It is free, done online on the official Udyam portal using the owner's Aadhaar, and linked automatically with PAN and GST data. From April 2025, a micro enterprise has investment up to Rs 2.5 crore and turnover up to Rs 10 crore, with higher limits for small and medium enterprises.
What is Udyam Registration?
Udyam Registration is the official identity for micro, small and medium enterprises in India. It replaced Udyog Aadhaar from 1 July 2020. Registered enterprises receive a permanent Udyam Registration Number and an e-certificate, which is used to claim benefits under central and state MSME schemes.
The process is self-declaration based and integrated with the Income Tax and GST systems, so investment and turnover figures are picked up from government databases rather than typed in manually.
Revised MSME classification
Enterprises are classified on both investment in plant and machinery (or equipment) and turnover. The limits revised with effect from 1 April 2025 are:
| Category | Investment up to | Turnover up to |
|---|---|---|
| Micro | Rs 2.5 crore | Rs 10 crore |
| Small | Rs 25 crore | Rs 100 crore |
| Medium | Rs 125 crore | Rs 500 crore |
An enterprise that exceeds either limit moves to the next category. Exports are excluded when calculating turnover for classification.
Who can register?
Any manufacturing or service enterprise can register, whether it is a proprietorship, Hindu Undivided Family, partnership firm, LLP, company, cooperative society or trust. Traders were brought within the MSME fold for priority sector lending purposes. Only one Udyam registration is allowed per enterprise, but multiple activities and units can be added to the same registration.
Short on time? Leegal can handle Msme Registration for you, end to end.
Get expert help →How to register on the Udyam portal
- Visit the official portal and choose the option for new entrepreneurs.
- Enter the Aadhaar number of the proprietor, managing partner, karta or authorised director and verify with OTP.
- Enter the PAN of the enterprise. PAN and GSTIN details are validated with government databases.
- Fill in business details: name, units, address, bank account, activity and NIC codes, and employee count.
- Submit with the final OTP. The Udyam Registration Number is generated and the certificate is emailed after processing.
Enterprises that are not required to have a GSTIN can register without one, but GSTIN is mandatory for those liable to GST.
Key benefits of MSME registration
- Protection against delayed payments: buyers must pay micro and small suppliers within the agreed period, capped at 45 days. Delayed amounts carry compound interest at three times the bank rate, and disputes can be taken to the MSME Samadhaan portal and the facilitation council.
- Tax disallowance for buyers: under Section 43B(h) of the Income Tax Act, buyers can deduct payments due to micro and small enterprises only when paid within the MSMED Act time limits, which improves collections.
- Collateral-free credit: eligible loans can be covered under the CGTMSE credit guarantee scheme.
- Government procurement: central ministries and PSUs target at least 25% of annual procurement from micro and small enterprises, with exemptions from tender fees and earnest money deposits for registered MSEs.
- Priority sector lending and access to state subsidies and schemes.
Beware of fake Udyam websites
Several private websites look like the official portal and charge high fees for a free registration. The only official site is udyamregistration.gov.in. A consultant may reasonably charge a professional fee for filing and advisory support, but should be transparent that the government charges nothing.
Keeping the registration updated
The certificate has no expiry, but details must be kept current. Classification is updated automatically each year from ITR and GST data, and the enterprise should update changes in address, activity, bank account or ownership on the portal. An inaccurate self-declaration can lead to cancellation of benefits and penalties under the MSMED Act.
Frequently asked questions
Is MSME and Udyam registration the same thing?
Yes. Udyam Registration is the current name of MSME registration. It replaced Udyog Aadhaar Memorandum from 1 July 2020. Enterprises that had Udyog Aadhaar were required to re-register on the Udyam portal to continue claiming MSME benefits.
Is Udyam registration free?
Yes. Registration on the official portal udyamregistration.gov.in is completely free of cost. Any payment demanded by a website for the registration itself is not a government fee. Professional fees are only for consultants who help with filing and advice.
Can a trader register under Udyam?
Yes. Retail and wholesale traders can register on the Udyam portal, and since 2021 they are included in the MSME category for priority sector lending. However, some MSME benefits and schemes are restricted to manufacturing and service enterprises.
What documents are required for Udyam registration?
Only the Aadhaar number of the proprietor, managing partner or authorised signatory, the PAN of the enterprise, and GSTIN where the business is liable to GST. Bank details and basic business information are entered on the form. No document uploads are needed.
Does Udyam registration need renewal?
No. Udyam registration is permanent and does not require renewal. Classification is updated automatically using ITR and GST data, but the enterprise must update any change in business details on the portal to keep the certificate accurate.
Let Leegal handle your Msme Registration
Documentation, filing and follow-up by a dedicated expert, so you can focus on running your business.
- Dedicated point of contact
- Transparent pricing
- Pan-India service