If you are a small business owner in India, you must have heard about Micro, Small, and Medium Enterprises (MSMEs). For many years, MSME registration has been running for small businesses, due to which they get government recognition and can enjoy benefits. But in the year 2020, the Government changed it and introduced a new and improved system called Udyam Registration.
Now, many businesses that had registered in the earlier Udyam Aadhar Memorandum (UAM) have been asked to migrate from the old one to the new Udyam portal. It may seem that this is another compliance task. But the truth is that if you migrate from the old MSME registration, then it is much more than a legal requirement. This is a very good, smart move for small businesses, and due to this, many new doors also open; you just have to go to the Udyam portal and use Udyam/Msme re registration online
In this article, we will understand why migrating from MSME to Udyam is not only mandatory but also brings a lot of benefits, like credibility and access to government schemes.
1. Understanding the Shift: MSME vs. Udyam
Before knowing its benefits, let us quickly understand the difference between these two systems.
MSME Registration before July 2020: Filing was done through Udyog Aadhaar Memorandum. It involved self-declared information and there were many businesses who considered this process a bit complicated and it was not very transparent either.
Udyam Registration after 2020: It is a fully digital and simplified system based on Aadhaar authentication. It has integrated with other government databases such as Income Tax and GST, making the system even more automatic and reliable.
2. It is no longer optional; it has become mandatory
The most important reason for migration is that
The Ministry of MSME has made it clear:
“Old MSME/Udyog Aadhaar Memorandum registrations are no longer valid after March 31, 2022.”
If your business is still using the old UAM, it is not officially recognized as an MSME anymore. This means:
- You may lose eligibility for MSME-related benefits.
- You cannot apply for new government tenders reserved for MSMEs.
- You’ll be considered unregistered under the new system.
So, if you want to remain on the government's radar as an active and recognized small business, migrating is a must.
3. Automatic Access to Government Schemes
Once you migrate to Udyam, your business details are automatically linked to key government platforms.
This opens doors to many benefits such as
- Collateral-free loans are available under the Credit Guarantee Scheme.
- Subsidy on patent and trademark fees is available
- Priority in government tenders
- Interest subsidies on loans
- Access to schemes like PMEGP, MUDRA, and more
With Udyam, there’s no need to resubmit your details for each scheme—the data is already there. This saves time and increases your chances of approval.
4. Integrated with GeM and TReDS
If you're looking to grow your business through government contracts or faster payments, Udyam makes that easier.
- Government e Marketplace (GeM): MSMEs who are registered can use the GeM portal to sell their products and provide various services to government departments
- Trade Receivable Discounting System (TReDS): It helps in providing you faster finance from the banks and NBFCs if you have any pending invoices with the big buyers.
Both platforms are directly linked to your Udyam Registration. So, by migrating, you unlock access to these powerful tools.
5. More Credibility for Your Business
Today, customers and investors often look for trust and transparency. Having an up-to-date Udyam Certificate through the update udyam proves that your business is officially recognized by the Government of India.
This certificate includes key details like:
- Udyam Registration Number (URN)
- Classification (Micro, Small, or Medium)
- PAN and GST details
It can be used to build trust with clients, banks, and even vendors. It’s more than a document—it’s your business ID card.
- Ease of Compliance and Renewal
The old MSME system required manual entries and updates. If you missed something, it often caused delays or errors.
With Udyam, things are much smoother:
- No physical documents required
- Auto-fetching of PAN and GST data
- No renewal required—once registered, you’re set unless your business category changes
This helps you stay compliant with minimal effort.
7. Better Financial Opportunities
Banks and NBFCs prefer lending to businesses that are officially recognized and have clean documentation.
When you migrate to Udyam:
- Your profile becomes part of a verified government database.
- You become eligible for special MSME loan schemes.
- Your credit profile improves.
This gives you a strong advantage when applying for loans, overdrafts, or even business partnerships.
8. Stay Ahead of Policy Changes
India’s MSME sector is evolving fast. The government continues to update policies and schemes for registered businesses.
By migrating to Udyam, your business becomes part of this growing ecosystem. You’ll:
- Receive updates and alerts directly from the portal.
- Be among the first to know about new opportunities.
- Stay ahead of competitors who are still using outdated systems.
9. It’s a Quick process
The best part? Migrating from MSME to the Udyam process takes just a few minutes if you have the required details ready:
- Aadhaar of the owner
- PAN and GST details (if applicable)
- Old UAM number (if available)
You can do it all online, without visiting any office.
Final Thoughts
Migrating from MSME to Udyam is more than ticking a compliance checkbox. It’s a way to modernize your business identity, gain credibility, and unlock powerful benefits from the government.
