Udyam Registration Certificate vs. MSME Registration Certificate: Which is More Suitable for You?


In the vibrant landscape of small and medium-sized enterprises (SMEs), the terms “Udyam Registration Certificate” and “MSME Registration Certificate” have become increasingly important. These certificates are not just pieces of paper; they are tools that can significantly impact the growth and success of your business. If you’re an entrepreneur or business owner in India, you’ve likely encountered these terms, but you might be wondering which one is more suitable for your specific needs. In this article, we will delve into the intricacies of both Udyam and MSME registration, highlighting their differences and helping you decide which one is the right choice for your enterprise.

Udyam Registration Certificate

The Udyam Registration Certificate is a relatively new concept in India’s business landscape, introduced in September 2020 to replace the earlier system of MSME registration. It is specifically designed to cater to the needs of micro, small, and medium-sized enterprises.

Key Features of Udyam Registration:

Digital Platform: 

Udyam Registration is an online platform, making the registration process quick and hassle-free. You can apply for it from the comfort of your home or office.

Single-Point Registration: 

Under Udyam Registration, businesses can register themselves just once and obtain a certificate that is valid for a lifetime. This eliminates the need for annual renewals, which was a requirement under the previous MSME registration system.

Based on Investment: 

Udyam Registration primarily classifies businesses based on their investments in plant and machinery or equipment. The investment limits are as follows:

  • Micro-enterprises: Investment up to Rs. 1 crore

  • Small enterprises: Investment up to Rs. 10 crore

  • Medium enterprises: Investment up to Rs. 50 crore

Easier Access to Benefits: 

Having a Udyam Registration Certificate grants businesses access to a range of government schemes and benefits, including financial support, subsidies, and priority lending from banks.

Competitive Advantage: 

It can be a valuable marketing tool, demonstrating your business’s credibility and making it more attractive to potential partners, customers, and investors.

MSME Registration Certificate

The term “MSME Registration” was prevalent before the introduction of Udyam Registration and continues to be used interchangeably with Udyam Registration in some contexts. However, it’s essential to understand the distinctions between the two.

Key Features of MSME Registration:

Basis of Classification: 

Unlike Udyam Registration, the classification of businesses for MSME Registration is based on two criteria: investment in plant and machinery and annual turnover. The limits for classification are as follows:

  • Micro-enterprises: Investment up to Rs. 25 lakh and turnover up to Rs. 10 lakh

  • Small enterprises: Investment up to Rs. 5 crore and turnover up to Rs. 2 crore

  • Medium enterprises: Investment up to Rs. 10 crore and turnover up to Rs. 5 crore

Renewal Requirement: 

Under the previous MSME Registration system, businesses had to renew their registration every five years. This is a key difference from Udyam Registration, which offers lifetime validity.

Eligibility for Government Benefits: 

MSME-registered businesses also enjoy access to various government incentives and support, similar to those under Udyam Registration.

Which is More Suitable for You?

The choice between Udyam Registration and MSME Registration depends on your business’s specific circumstances and requirements. Here are some factors to consider:

Age of Your Business: 

If your business has already registered as an MSME before the introduction of Udyam Registration and you are comfortable with the existing criteria, you may not need to transition to Udyam Registration. However, new businesses are advised to opt for Udyam Registration for its simplified and lifelong validity.

Investment and Turnover: 

Consider the investment and turnover of your business. If it falls within the investment limits set by Udyam Registration, it might be a more straightforward and convenient option.

Renewal Process: 

If you want to avoid the hassle of renewing your registration every five years, Udyam Registration offers a significant advantage.


Udyam Registration is a fully digital process, making it accessible and convenient. If you prefer online transactions and record-keeping, it may be the more suitable choice.

Note: You Can Apply for Print Udyam Certificate


Both Udyam Registration and MSME Registration serve the purpose of facilitating government support and recognition for small and medium-sized enterprises. Your choice depends on your business’s age, investment, turnover, and your preference for renewal procedures. Regardless of which one you choose, the key takeaway is that registration is a crucial step for your SME. It opens the doors to a multitude of benefits and opportunities, helping you grow and thrive in the competitive business landscape of India. So, make an informed decision based on your unique business needs and set your enterprise on the path to success.