In India, Micro, Small, and Medium Enterprises (MSMEs) are the backbone of the economy. They contribute significantly to industrial growth, job creation, and innovation. To support these enterprises, the Government of India launched the Udyam Registration Portal, a simple and paperless online system that provides official recognition and numerous benefits to MSMEs.
However, before registering your business, it’s important to know who is eligible to apply on the Udyam Portal. Understanding the eligibility criteria ensures you register under the correct category and make full use of the benefits available to MSMEs.
1. What Is Udyam Registration?
Udyam Registration is the official government process through which businesses in India are recognised as Micro, Small, or Medium Enterprises (MSMEs) under the Micro, Small, and Medium Enterprises Development (MSMED) Act, 2006.
The registration is done entirely online on the Udyam Portal and provides businesses with a unique Udyam Registration Number (URN) and a Udyam Certificate.
This certificate acts as proof that your enterprise is officially recognized by the Government of India and is eligible to receive MSME-related benefits such as loans, subsidies, and tender opportunities.
2. Who Can Apply for Udyam Registration?
The Udyam Registration system is open to a wide range of businesses operating in the manufacturing, production, or service sectors. According to the government’s classification, any entity involved in the production of goods or the provision of services can apply for Udyam Registration if it meets the investment and turnover criteria set for MSMEs.
Eligible Entities Include:
Proprietorship Firms
Partnership Firms
Limited Liability Partnerships (LLPs)
Private Limited Companies
Public Limited Companies
One Person Companies (OPCs)
Self Help Groups (SHGs)
Co-operative Societies
Hindu Undivided Families (HUFs)
Any other entity engaged in manufacturing or services
So, whether you run a small shop, an e-commerce store, a digital service company, or a factory — you are eligible to register on the Udyam Portal as long as your business meets the MSME classification criteria.
3. Eligibility Based on MSME Classification
The eligibility for Udyam Registration depends primarily on two factors:
Investment in Plant and Machinery or Equipment
Annual Turnover
The Government of India revised the MSME classification on 1st July 2020 to make it more inclusive.
Here’s a breakdown of the MSME classification criteria:
Micro Enterprise: Investment up to ₹1 crore and turnover up to ₹5 crore.
Small Enterprise: Investment up to ₹10 crore and turnover up to ₹50 crore.
Medium Enterprise: Investment up to ₹50 crore and turnover up to ₹250 crore.
If your business falls within any of these limits, you can register your enterprise on the Udyam Portal as an MSME.
4. Eligibility for Manufacturing and Service Sectors
The Udyam Portal covers both manufacturing and service-based businesses.
Manufacturing Sector:
Businesses engaged in the production or processing of goods can apply. Examples include:
Textile and apparel units
Food processing industries
Machinery and equipment manufacturers
Furniture-making units
Handicraft and artisan businesses
Service Sector:
Businesses providing services or digital solutions are also eligible, such as:
IT and software companies
Digital marketing agencies
Repair and maintenance services
Educational and training institutes
Hospitality and tourism businesses
Thus, Udyam Registration supports a wide variety of enterprises, from traditional manufacturing units to modern startups in the service industry.
5. Eligibility for New and Existing Businesses
New Businesses: Entrepreneurs starting a new business can register on the Udyam Portal even before commencing operations. This early registration allows them to access government schemes, funding, and other MSME-related advantages from the start.
Existing Businesses: If you already have an MSME registration under the old system (Udyog Aadhaar), you must re-register on the Udyam Portal using your Aadhaar and PAN details.
6. Ineligible Entities for Udyam Registration
While the Udyam Portal is open to most businesses, certain types of organisations are not eligible for registration. These include:
Trading companies are engaged solely in buying and selling goods without manufacturing or providing services.
Agricultural activities that are not classified as manufacturing or food processing.
Non-profit organisations or charitable trusts are not engaged in business activities.
Businesses that exceed the investment and turnover limits for MSMEs.
If your business doesn’t fit the MSME definition, you cannot register on the Udyam Portal.
7. Why Eligibility Matters
Understanding your eligibility before registration ensures that your application is valid and approved without issues. Incorrect classification or false declaration can lead to:
Rejection or suspension of your registration
Loss of MSME benefits
Legal action for misrepresentation
Therefore, always ensure that your business’s investment and turnover figures are accurate before applying.
8. Benefits of Udyam Registration for Eligible Businesses
Once registered, eligible MSMEs enjoy several benefits under government schemes and financial programs. Some major advantages include:
Collateral-Free Loans: Access to unsecured business loans under the CGTMSE scheme.
Subsidies and Incentives: Avail subsidies for patent registration, ISO certification, and electricity bills.
Legal Protection: Protection against delayed payments from buyers.
Tender Benefits: Preference in government procurement and tender participation.
Easy Credit Access: Priority sector lending benefits from banks.
Tax and Compliance Benefits: Easier licensing and approvals from various government departments.
Note: You can also Download Udyam Certificate from our website
Conclusion
If you’re running a business in India, registering on the Udyam Portal is one of the smartest steps you can take. It gives your enterprise official recognition, access to financial and legal benefits, and a strong foundation for growth.
To be eligible, your business must be involved in manufacturing or service activities and fall within the MSME investment and turnover limits.
Once registered, your Udyam Certificate becomes your gateway to government schemes, credibility, and long-term success in the competitive business world.
So, don’t wait — check your eligibility and register your business on the Udyam Portal today!
