Registration of MSME unit – Udyog Aadhaar Memorandum

By | March 10, 2019


Registration of MSME unit – Udyog Aadhaar Memorandum


  • Udyog Aaadhar Memorandum is the online registration process of MSMEs. This was initiated by the ministry of MSME.

  • Micro, Small and Medium Enterprises are the largest employment providers after Agriculture sector. Further, they are growth drivers of the country especially in rural India. As more than 60 % of our population lives in rural areas development of these areas is very important. Therefore, the scope of MSME is further enhanced and now, entire non-agriculture sector is under MSME. Therefore, entire MSME is classified into two categories i.e.

      • Manufacturing Enterprises

      • Service Enterprises.

The definition of these enterprises /sectors are :

  • Manufacturing Enterprises: The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951 or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use are classified as Manufacturing enterprises.

  • Service Enterprises: The enterprises engaged in providing or rendering of services are classified as Service Enterprises. These enterprises are further classified as

          (1). Micro enterprise,

          (2). Small enterprise,

          (3). Medium enterprise.

  • Classification of Manufacture enterprise is based on the investment in Plant & Machinery where as Service enterprise is based on the investment in equipment.

The detailed classification is:


UAM Category


Investment in plant & machinery / equipment

Micro Enterprises



Does not exceed Rs. 25 Lacs



Does not exceed Rs. 10 Lacs

Small Enterprises



More than Rs. 25 lakhs to Rs. 5 Crores



More than Rs. 10 lakhs to Rs. 2 Crores

Medium Enterprises



More than Rs. 5 crores to Rs. 10 crores



More than Rs. 2 Crores to Rs. 5 Crores


Registration process of MSMEs:

  • MSMEs were to be registered with District industries Centers (DICs). In the year 2006 the process is changed to filing of EM-I and EM-II ( EM-I is for units not yet commenced operations and EM-II is for those units commenced operations ). Even the process of filing EM-I and EM-II is cumbersome and there is no follow up for those units to file EM-II after commencing of operations.

  • Therefore, to ease the registration process , the Ministry of MSME has initiated online registration process – “Udyog Aadhar Memorandum (UAM)” in the year 2015. Thus, now, the UAM replaces filing of both EM-I and EM-II.

  • Udyog Aadhar Memorandum is a dynamic and very simple one page data entry in the website This one page data entry is in a self- declaration format, in which the enterprise will self-certify its existence,address details, bank account details, promoter / owner’s Aadhaar details and other minimum basic information required. Once the data is submitted by the enterprise (MSME) a unique Identification number (for the enterprise) will be generated and this unique number is the “Udyog Aadhaar Number” for the enterprise.

    Advantages of Registration of MSMEs:

  • With the registration, the enterprise can seek information about various schemes / services offered by various ministries. (many ministries have different schemes for MSMEs and information on all these can be obtained using the UAM ).

  • Generation of UAM is free-of- cost. Further, it is paperless and can be generated instantaneously.

  • UAM is mandatory for availing Credit Guarantee.

  • Interest rate concession on Overdraft, Term Loans. This concession is available for both new and existing units.

  • Special concessions in International Trade fairs / Exhibitions etc.

  • Concessions in Sales tax, electricity expenses, payment of stamp duty, registration fees etc.

  • Reimbursement of Octroi and Expenses incurred with respect obtaining ISO certification.

  • GoI has made it mandatory to procure from MSMEs. In order to get eligibility in participating such tenders Registration of MSME enterprise is required.

  • To get eligibility to participate in Government tenders.

  • To be eligible for CLSS Subsidy. This subsidy is available for new and existing units as well.

Therefore, while establishing an enterprise, don’t forget to register the enterprise and take advantage of registration of MSME.

All the best



Leave a Reply

Your email address will not be published.