Everything You Need to Know About New MSME Udyam Registration Process and the Penalty Involved


MSMEs, or Micro, Small and Medium Enterprises, are crucial for the growth and development of the Indian economy. To support MSMEs, the government has introduced the Udyam registration process, which requires businesses to register and obtain a Udyam Aadhaar. In this article, we will discuss everything you need to know about the new MSME Udyam registration process, including the penalty for non-compliance.

As a business owner, it’s important to stay up-to-date with government regulations and requirements. The new MSME Udyam registration process is a critical aspect of compliance, and understanding the process is essential for the growth and success of your business.

The new MSME Udyam registration process provides various benefits to small businesses, including better access to government schemes and financing opportunities.

Benefits of registering for Udyam Aadhaar

  1. Access government schemes: Businesses with Udyam registration can access various government schemes aimed at supporting MSMEs, such as credit guarantees, support for technology upgradation, and marketing assistance.
  2. Obtain financing: Banks and financial institutions give priority to MSMEs with Udyam registration when providing financing.
  3. Establish credibility: Udyam registration establishes the credibility of a business, making it easier to create partnerships or to apply for contracts.

Another essential benefit of Udyam Aadhaar registration is that it enables businesses to participate in different government schemes and initiatives, such as Prime Minister Employment Generation Programme (PMEGP), the Credit Guarantee Fund Scheme, among others. These initiatives provide various funding and support mechanisms for MSMEs, including subsidies, interest rate reductions, and credit facilities, among others.

In addition, registering under Udyam Aadhaar helps businesses establish their credibility and forge partnerships with other organisations. They can use their registration number to apply for tenders and contracts, improving their chances of securing new business opportunities and exploring new markets.

New MSME Udyam Registration Process

The new MSME Udyam registration process, introduced on July 1, 2020, requires businesses to register on the official Udyam Registration portal using their Udyog Aadhaar number (UAN) or PAN card number. The registration process is entirely online and straightforward, with no cost involved.

  • Step 1: Go to the Udyam Registration portal (https://udyamregistration.gov.in/).
  • Step 2: Enter the UAN or PAN card number and the registered mobile number.
  • Step 3: Verify the OTP sent to the registered mobile number.
  • Step 4: Enter the required details, such as the business name, type, and address.
  • Step 5: Submit the application.

However, for businesses that fail to comply with the new Udyam registration process, there could be significant consequences. Not only do they risk losing access to government schemes and initiatives, but they could also face stiff penalties. Therefore, it is essential to complete the registration process and ensure compliance with these regulations.

Penalty for Non-Compliance

The government has set strict penalties for businesses that fail to comply with the new Udyam registration process. If a business does not register for Udyam Aadhaar and continue to operate without registration, there will be a penalty.

The penalty for non-compliance is as follows:

  1. A fine of Rs. 1,000 per day for businesses that fail to register within the stipulated time.
  2. A fine of Rs. 10,000 for businesses that provide false or misleading information during the registration process.
  3. A fine of Rs. 1,00,000 or imprisonment for up to 6 months for businesses that falsely claim to be MSMEs.

Professional consultants can help businesses navigate through the Udyam registration process and ensure that they comply with government regulations. They can assist in determining the right type of registration, completing the required documentation, and responding to any queries or concerns that businesses may have during the registration process.


The new MSME Udyam registration process is designed to support the growth and development of small businesses in India. The registration process is straightforward and can be completed online. The benefits of Udyam Aadhaar registration include access to government schemes and funding sources, improved credibility and visibility, and new business opportunities. By ensuring compliance with these regulations and seeking professional consultation, small businesses can navigate through the process seamlessly and access various schemes and initiatives that can support their growth and success.

As a business owner, you must register your business for Udyam Aadhaar to ensure compliance with the new regulations. By registering, you access various government schemes, financing opportunities, and establish your business’s credibility. If you need assistance with the Udyam registration process, consider seeking the help of professional consultants who can guide you through the process and ensure compliance with the regulations.