What is Udyam Registration Number and Why Does It Matter for MSMEs?

If you're running or planning to start a small business in India, chances are you’ve heard about the Udyam Registration Number. But what is Udyam registration, and why should it be on your priority list? Udyam registration gives your business formal recognition under India’s MSME (Micro, Small, and Medium Enterprises) framework. It opens the door to a host of government benefits, as well as financial, legal, and operational advantages. With a valid registration number, your MSME can tap into credit schemes, tax support, and procurement opportunities.

What is Udyam Registration?

Udyam registration is an online process launched by the Ministry of MSME to simplify MSME recognition in India. It is free, paperless, and based entirely on self-declaration. The goal is to help micro, small, and medium-sized enterprises formalise their business with ease.

Once registered, a business receives a permanent, unique 16-digit alphanumeric Udyam Registration Number. This serves as your official MSME registration ID.

What Is Udyam Registration Number (URN)?

The Udyam Registration Number is a digital ID issued to MSMEs after successful registration. This 16-digit code, printed on your Udyam certificate, helps identify your business in government databases.

Think of it as a PAN card for your enterprise. It’s permanent, doesn’t require renewal, and provides access to various MSME-specific benefits, including government schemes, subsidies, and procurement platforms.

Udyam Registration Number Format Explained

When a business registers under the Udyam portal, it is assigned a unique Udyam Registration Number (URN), also referred to as the MSME registration number. This number is essential for availing government schemes, subsidies, and benefits designed for MSMEs.

The URN follows a standardized format to ensure uniformity and traceability across India.

Present Format of Udyam Registration Number

Example: UDYAM-XX-00-0000000

Breakdown of the Format

1. UDYAM Prefix

• Every registration number begins with the word “UDYAM.”
• This prefix indicates that the business is registered under the official Udyam portal for MSMEs.

2. State Code (XX)

• The next two letters represent the state or union territory code as per the Indian census/administrative codes.
• Example: MH = Maharashtra, DL = Delhi, KA = Karnataka.

3. District Code (00)

• The following two digits denote the district code where the MSME is registered.
• This ensures location-specific identification of the business.

4. Unique Business Number (Last 7 Digits)

• The final seven digits form a unique identifier assigned to each registered business.
• This prevents duplication and provides easy traceability in government records.

Why This Format Matters

• Ensures standardized identification of MSMEs across India.
• Helps in easy verification of authenticity on the Udyam portal.
• Facilitates traceability of location (state & district) for policy support and benefits.

Who Needs Udyam Registration?

Any business that falls under the Micro, Small, or Medium Enterprise category, as per the investment and turnover limits, is eligible.

Here’s who should register:

• Sole proprietors
• Partnership firms
• Private limited companies
• LLPs, trusts, or societies

The classification is based on:

• Micro: Investment ≤ ₹1 crore, Turnover ≤ ₹5 crore
• Small: Investment ≤ ₹10 crore, Turnover ≤ ₹50 crore
• Medium: Investment ≤ ₹50 crore, Turnover ≤ ₹250 crore

Also Read: MSME Small Business Loan for Women Entrepreneurs

Key Benefits of Having a Udyam Registration Number

Obtaining a Udyam Registration Number provides MSMEs with formal recognition and access to a wide range of government-backed benefits. From financial support to market opportunities, URN empowers small businesses to grow faster, operate more efficiently, and compete on a level playing field with larger enterprises.

1. Financial Benefits

• Easier, collateral-free loans – Banks and NBFCs offer unsecured loans to Udyam-registered MSMEs with less paperwork.
• Lower interest rates – Registered businesses can avail loans at concessional interest rates, usually 1–1.5% below market rates.
• Subsidies on patents and trademarks – Government provides financial aid for patent registration and trademark protection.
• Reimbursement for ISO certification – MSMEs can claim cost reimbursements for obtaining ISO certification.
• Tax exemptions and concessions – Eligible MSMEs enjoy tax rebates and electricity bill concessions.
• Extended credit for Minimum Alternate Tax (MAT) – The MAT credit period is extended from 10 to 15 years for registered units.

2. Operational & Market Benefits

• Protection against delayed payments – MSMEs can legally claim compound interest if buyers delay payments beyond 45 days.
• Preference in government tenders – Udyam-registered businesses get priority in public procurement policies.
• Ease of getting licenses and approvals – Regulatory approvals and clearances become faster and smoother.
• Access to government schemes – MSMEs are eligible for schemes like Credit Guarantee Fund, Capital Subsidy, and skill development programs.
• Increased market visibility and credibility – A valid URN enhances trust and recognition among customers and partners.

3. Process-Related Benefits

• Free and paperless – Registration is completely online with no fees involved.
• Lifetime validity – Once registered, the Udyam number remains valid without renewal.
• Single-window system – Businesses can access multiple government services from one platform.
• Digital integration – Udyam is linked with Income Tax and GST systems, making compliance seamless.

Also Read: Top MSME GST Loan Schemes

How to Apply for Udyam Registration Online?

Here’s how to complete your Udyam registration online in a few steps:

1. Visit the Udyam Portal: Go to the official Udyam Registration website.
2. Select Entrepreneur Type: Choose whether you're registering as a new MSME or migrating from UAM/EM-II.
3. Aadhaar Verification: Enter the Aadhaar number of the proprietor or authorised person. An OTP will be sent to the mobile number linked to your account.
4. PAN Verification: Enter your PAN and validate it on the portal.
5. Fill the Form: Provide organisation details, bank account info, business activity, and turnover/investment details.
6. Submit and Verify: Review the details and complete OTP verification.
7. Download Certificate: After submission, you’ll receive the Udyam registration certificate via email within 2–4 business days.

How to Verify and Update Your Udyam Registration Number Online

Keeping your Udyam Registration Number (URN) up to date is crucial for availing MSME benefits without interruption. By verifying the authenticity of your URN and updating details like address, bank information, or NIC code, you ensure smooth access to government schemes and compliance support.

Steps to Verify Udyam Registration Number Authenticity

1. Visit the official Udyam Registration portal.
2. Click on “Verify Udyam Registration Number” under the services menu.
3. Enter your URN (e.g., UDYAM-XX-00-0000000).
4. Provide the captcha code and submit.
5. The system will display the registered business details for confirmation.

Steps to Update Udyam Registration

1. Log in to the Udyam portal using your URN and mobile number linked with Aadhaar.
2. Select “Update Udyam Registration” from the dashboard.
3. Edit the required details such as: Business address, Bank account details, NIC code (business activity), Additional business information.
4. Submit the updated form online.
5. Changes will be verified and reflected in your profile after successful approval.

Importance of Keeping Registration Details Accurate

• Ensures uninterrupted access to MSME schemes and subsidies.
• Prevents discrepancies during loan applications or government tenders.
• Helps maintain authenticity and credibility of your MSME records.

In Case of Incorrect Information During Registration

• Log in to the Udyam portal and use the correction/update option.
• If technical issues persist, contact the Udyam helpdesk or local MSME facilitation office.
• Always cross-check submitted details before final submission to avoid rejections.

Also Read: How Digital Onboarding Simplifies MSME Loan Processes

Common Issues and Solutions Related to Udyam Registration Number

While registering for or managing a Udyam Registration Number, businesses may face technical or documentation challenges. Identifying these issues early and applying the right solutions ensures uninterrupted access to MSME benefits and prevents delays in verification or updates.

Aadhaar and PAN Mismatch

• Issue: If the Aadhaar number of the proprietor/partners and the PAN details do not match, the registration may get rejected.
• Solution: Double-check that Aadhaar and PAN details are correctly updated in government records. In case of errors, update them through UIDAI (for Aadhaar) or NSDL (for PAN) before retrying.

Incorrect Enterprise Classification

• Issue: Many businesses mistakenly choose the wrong category (Micro, Small, or Medium) based on turnover or investment limits.
• Solution: Review the latest MSME classification criteria on the Udyam portal and select the appropriate category. If already registered, log in and update the classification online.

Technical Problems with the Portal

• Issue: Slow loading pages, failed submissions, or server downtime may interrupt the registration or update process.
• Solution: Retry during non-peak hours, clear browser cache, or switch to another browser. For persistent issues, contact the official Udyam support team.

OTP and Forgotten URN Issues

• Issue: Many users face problems receiving OTPs during login or lose their URN after registration.
• Solution: Ensure the registered mobile number is active and linked with Aadhaar. If URN is forgotten, use the “Forgot Udyam Registration Number” option on the portal by entering Aadhaar/PAN details.

Errors After Registration

• Issue: Incorrect details such as address, bank account, or NIC code may reflect after successful registration.
• Solution: Use the “Update Udyam Registration” feature on the portal to correct errors. Changes will be validated and updated in the system after verification.

Avoiding Unofficial Portals

• Issue: Many third-party websites mislead MSMEs by charging fees for Udyam registration, which is officially free.
• Solution: Always use the official Udyam Registration portal for registration, verification, or updates.

Conclusion

The Udyam Registration Number is more than an official identifier; it is a key enabler for MSMEs to access growth opportunities, financial support, and legal safeguards. By simplifying the process of what is Udyam registration, this system opens the door to credit, MSME loans, subsidies, tax benefits, and protection against delayed payments, helping small and medium-sized businesses compete on a more level playing field. Whether you are starting or expanding, obtaining your Udyam Registration Number demonstrates a commitment to resilience and sustainability. It is a practical step toward reducing financial strain and positioning your business for long-term success in India’s dynamic market.

FAQs

Q.1. Is Udyam Registration mandatory for MSMEs?

A. Since July 1, 2021, Udyam Registration has been mandatory for all enterprises that wish to be officially recognised as MSMEs and avail government benefits. Without it, you cannot access MSME-specific schemes, subsidies, or formal protections.

Q.2. How can I get a Udyam Registration Number?

A. You can apply for your Udyam Registration Number by visiting the official Udyam portal. Complete the online form using your Aadhaar and PAN, validate with OTP, and submit your business details. After processing, you’ll receive a 16-digit registration number via email.

Q.3. Can I use Udyam Registration for loan applications?

A. Udyam Registration is often required by banks and NBFCs when apply for business loans. It strengthens your credit profile and allows access to collateral-free loans, subsidised interest rates, and priority sector lending facilities.

Q.4. Is Udyam Registration free of cost?

A. Absolutely. The entire Udyam Registration process is free of charge. You don’t need to pay any consultant or third party. Just visit the official portal and complete the form yourself.

Q.5 What documents are needed for Udyam Registration?

A. You will need:

• Aadhaar number of the proprietor/authorised person
• PAN card of the enterprise
• GSTIN (if applicable)
• Business address proof (e.g., electricity bill)
• Bank account details
• Investment and turnover details

Q.6. Is there a difference between Udyam and old MSME registration?

A. Udyam replaced the earlier UAM/EM-II registration. Unlike the older system, Udyam uses a digital, Aadhaar- and PAN-based process. It offers permanent registration numbers and lifetime validity, with auto-integration into tax and GST systems.

Q.7. Can I edit details in my Udyam Registration later?

A. You can log in to the Udyam portal using your registration number and OTP to update details such as address, bank info, or turnover. However, key fields like Aadhaar and PAN cannot be changed once submitted.

Disclaimer:

The contents of this article are for information purposes only and not a financial advisory. The information is subject to update, revision, and amendment and may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject Godrej Capital or its Affiliates to any requirements. Godrej Capital or its Affiliates shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any decisions, financial or otherwise based on the contents and information mentioned. For more information, please visit www.godrejcapital.com