Understanding Udyam Registration Portal: Eligibility and Classification Demystified

The Udyam Registration Portal is a government initiative designed to support and promote small businesses in India. It offers several benefits to registered enterprises, including easier access to credit, reduced interest rates, and various government scheme benefits. In this blog, we will dive deep into the eligibility criteria and classification process for Udyam Registration portal to help small business owners understand how they can take advantage of this platform.

Related Read: Udyam Registration and Udyog Aadhar: What’s Changed and What’s New?

What is Udyam Registration Portal?

Udyam Registration Portal is an online platform established by the Ministry of Micro, Small and Medium Enterprises (MSME) of the Indian government. It aims to simplify the registration process for small businesses and provide them with numerous advantages. The portal is user-friendly and facilitates easy access to registration, making it convenient for entrepreneurs to get their businesses recognized under the MSME Act.

Eligibility Criteria for Udyam Registration Portal

To be eligible for Udyam Registration, a business must meet certain criteria:

Criteria 1

The business should be a micro, small, or medium enterprise as per the new MSME classification. The classification is based on investment in plant and machinery or equipment for manufacturing or service enterprises. Micro-enterprises have a lower investment threshold compared to small and medium enterprises.

Criteria 2

The enterprise must be registered as a legal entity under the relevant laws of India. This means it should have the necessary business licenses and permits as required by the industry.

Criteria 3

The Udyam Registration is available only for businesses that are owned, controlled, or operated by Indian citizens. Foreign companies and enterprises with non-Indian ownership are not eligible for registration under this portal.

Documents Required for Registration

To complete the Udyam Registration process, certain documents need to be submitted. These documents are:

Document 1

Proof of business registration, such as the GST Identification Number (GSTIN) or any other applicable registration.

Document 2

Aadhaar card of the business owner or the person authorized to apply on behalf of the business.

Document 3

Bank account details of the business, which will be used for communication and verification purposes.

The Registration Process

The Udyam Registration process involves the following steps:

Step 1

Visit the Udyam Registration Portal ( and click on the “New Entrepreneurs” tab.

Step 2

Fill in the required details, including the Aadhaar number, name, PAN number, and business details.

Step 3

Submit the necessary documents and complete the verification process. Once approved, you will receive the Udyam Registration Certificate.

Classification under Udyam Registration

The Udyam Registration Portal classifies businesses based on their investment in plant and machinery or equipment. The classification is as follows:

Classification 1

Micro-enterprises: Businesses with investments up to INR 1 crore in the manufacturing sector or up to INR 50 lakhs in the service sector.

Classification 2

Small enterprises: Businesses with investments between INR 1 crore and INR 10 crores in the manufacturing sector or between INR 50 lakhs and INR 5 crores in the service sector.

Classification 3

Medium enterprises: Businesses with investments between INR 10 crores and INR 50 crores in the manufacturing sector or between INR 5 crores and INR 25 crores in the service sector.

Benefits of Udyam Registration Portal

Udyam Registration offers several benefits to small businesses:

Access to Financial Assistance:

Udyam Registration provides small businesses with easy access to collateral-free loans and credit facilities from various financial institutions. These loans come at lower interest rates, which can significantly reduce the financial burden on entrepreneurs and support their business growth.

Government Tenders and Procurement:

Registered Udyam enterprises receive preference in government tenders and procurement processes. This preference gives them a competitive edge and opens up opportunities to secure contracts with government departments and organizations.

Subsidies and Incentives:

The government offers various subsidies and incentives to Udyam-registered businesses to encourage their development and expansion. These incentives can include tax benefits, reduced fees for certifications, and access to government-funded schemes and programs.

Easier Compliance and Licensing:

With Udyam Registration, small businesses experience streamlined processes for compliance and licensing. The registration certificate acts as proof of their legal existence, reducing bureaucratic hurdles and making it easier to operate within regulatory frameworks.

Brand Credibility and Trust:

Being a registered Udyam enterprise enhances the brand credibility and trustworthiness in the eyes of customers and partners. It indicates that the business is recognized by the government and adheres to certain standards, giving stakeholders more confidence in their dealings.

Participation in Trade Fairs and Exhibitions:

Udyam-registered businesses are often eligible to participate in trade fairs, exhibitions, and industry-specific events organized by the government. These events offer opportunities for networking, showcasing products, and finding potential customers or collaborators.

Access to Technical and Business Support:

The government provides support in the form of training programs, skill development initiatives, and technology upgradation schemes for Udyam enterprises. This assistance helps businesses stay competitive and stay abreast of industry trends and advancements.

Protection of Intellectual Property:

Udyam Registration can also help protect the intellectual property of small businesses. In cases of trademark infringement or copyright violation, having a registration certificate can strengthen their legal position and facilitate the enforcement of their rights.

International Recognition and Export Benefits:

Udyam-registered businesses may receive preferential treatment when it comes to exporting their products or services. The government may offer export incentives and assist in accessing international markets, boosting the business’s global prospects.

Simplified Government Compliances:

Registered Udyam businesses often experience simplified government compliances, such as easier tax filings and reduced regulatory reporting requirements. This can save time and resources, allowing entrepreneurs to focus more on growing their business.

Also Read: Udyam Registration Benefits in Hindi


The Udyam Registration Portal is a valuable platform for small business owners seeking recognition and support from the government. By fulfilling the eligibility criteria and following the registration process, businesses can gain access to various benefits that can boost their growth and competitiveness. It is a step towards fostering entrepreneurship and strengthening the foundation of India’s economy.

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