The micro, small and medium enterprises sector plays a crucial role in the growth of the indian economy. It makes a significant contribution to India gross domestic product and employment and exports. This sector acts as a backbone of indian entrepreneurship.
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Currently, micro, small and medium enterprise contribute close to 6.11 per cent of the manufacturing gross domestic product and 24.63 per cent of the gross domestic product from service activities. In addition to this, 33.4 per cent of India manufacturing output comes from the micro, small and medium enterprise sector, providing employment to around 120 million people and contributing around 45 per cent of the overall exports from India.
Since 20 per cent of the micro, small and medium enterprise operate out of rural areas, it provides employment to a huge chunk of the rural workforce. Thus micro, small and medium enterprise sector plays an important role in boosting sustainable and by minimising regional disparities and guaranteeing an equitable allocation of national income and wealth, inclusive development can be achieved.
As a result, in order to give benefits like trouble free access to credit and encouraging ease of doing business, doing business and udyog aadhaar was introduced by the ministry of micro, small and medium enterprise.
Given this backdrop, let us understand what is udyog aadhaar is, its benefits and the process of registration.
What is udyog aadhaar?
Prior to the implementation of the micro, small and medium enterprise development act 2006, the micro, small and medium enterprise sector was defined as the small scale industries sector. The periodic criteria were used to identify the small and auxiliary units that make up the small scale industry sector.
With the coming of the micro, small and medium enterprise development act, 2006, the scope of the micro, small and medium enterprise sector was extended. In place of simply industries as under small scale industries, the concept of the enterprise was introduced to include both manufacturing and service sectors.
Following the implementation of the micro, small and medium enterprise development act, 2006, the registration process for the micro, small and medium enterprise involved the filing of two forms. This includes entrepreneur memorandum one and entrepreneur memorandum two. Where entrepreneurs memorandum one was for the proposed or upcoming enterprises and discretionary in nature, entrepreneurs memorandum two was required to be filed by the existing enterprises.
Further, entrepreneurs memorandum two was required to be filed with the district industries centre in the concerned state and union territory immediately after the project kicks off.
In order to promote ease of doing business and simplify the process of micro, small and medium enterprise registration further, the ministry of micro, small and medium enterprise introduced the udyog aadhaar registration.
Udyog aadhaar registration is basically a single page online registration of the micro, small and medium enterprise. Under udyog aadhaar, the micro, small and medium enterprise can register via a self declaration in udyog aadhaar memorandum, with no additional documents to be submitted for the same.
Further, the micro, small and medium enterprise are not required to pay any fees and can file more than one udyog aadhaar with the same aadhaar number.
Classification of micro, small and medium enterprise as per micro, small and medium enterprise development act, 2006.
According to the micro, small and medium enterprise development act 2006, micro, small and medium enterprise are classified into the following two categories.
These are the enterprise that is either.
Involved in the manufacturing and production of goods concerning the industries specified in industries development and regulation act 1951.
Using plant and machinery for adding value to the final goods having a different use and character and name.
Further, a manufacturing unit is defined in terms of the amount invested in plant and machinery by such a unit.
These are the enterprises that are involved in providing service. Such enterprise are defined by the amount of money they put into the equipment they utilise to provide service.
Following is the limit for investment in plant and machinery and equipment by manufacturing and service enterprise to be classified as a micro, medium and small enterprise.
What is udyog aadhaar memorandum?
A single page registration form is the udyog aadhaar memorandum. It comprises a self declaration format through which the micro, small and medium enterprise seeking registration self certifies its existence and bank account details and owner aadhaar details and other basic information as required.
All micro, small and medium enterprise manufacturing of goods or providing services are required to file udyog aadhaar memorandum. Provided such micro, small and medium enterprise fall within the turnover limits mentioned in section 7 of the micro, small and medium enterprise development act, 2006.
This micro, small and medium enterprise are required to specify the number of activities including manufacturing of services in the udyog aadhaar memorandum. The following individual according to the type of business structure are required to furnish the aadhaar number in the memorandum. These individuals are as follows.
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In the case of a proprietorship firm, the lone proprietor.
In the case of a partnership firm, the managing partner.
Karta is utilised in the case of a hindu undivided family.
However, in the following cases, the permanent account number of the organization along with the aadhaar Number of the authorized signatory also needs to be mentioned in the udyog aadhaar memorandum.
Limited liability partnership.
The micro, small and medium enterprise seeking registration is not required to pay any fee for filing udyog aadhaar memorandum.
Micro, small and medium enterprise can fill the udyog aadhaar memorandum by visiting https://udyogaadhaar.org the registration portal and the ministry of micro, small and medium enterprises has created an online platform.
Individual with an aadhaar number can apply for an udyog aadhaar using the online method. However, having an aadhaar number is not necessary for registering as a micro, small and medium enterprise under udyog aadhaar. Accordingly, there are two ways in which micro, small and medium enterprise can register under udyog aadhaar.