If you run a small business in India or plan to start one, getting Udyam Registration is a smart move. It helps you get government benefits like easier loans, subsidies, and participation in government tenders. But many people make small mistakes while registering, which can cause delays, rejections, or even legal trouble.

In this blog, we'll explain the most common mistakes people make during Udyam Registration and how you can avoid them — all in simple, easy-to-understand language.

What is Udyam Registration?

Before we jump into the mistakes, here's a quick reminder.

Udyam Registration is an online process launched by the Government of India for Micro, Small, and Medium Enterprises (MSMEs). It replaces the older Udyog Aadhaar system and is 100% paperless.

You get a unique Udyam Registration Number (URN) and an e-certificate, which proves that your business is officially recognized as an MSME.

As of 2025, more than 2.8 crore businesses have registered under Udyam, according to the Ministry of MSME.

Common Mistakes to Avoid

Let's go through the mistakes one by one and learn how you can avoid them.

1. Wrong Aadhaar Number or Name

Many people enter incorrect Aadhaar numbers or names during registration. Since Aadhaar is mandatory for the owner or director, any mismatch can lead to rejection.

 What to do:

  • Double-check the spelling of your name as per Aadhaar.
  • Ensure the Aadhaar number is correct and active.
  • Do not use someone else's Aadhaar card.

2. Confusing Business Type

Many people are confused about whether their business is a proprietorship, partnership, or company. Choosing the wrong type can lead to problems in the future.

What to do:

  • If you are the only owner, select Proprietorship.
  • If you have a registered firm, company, or LLP, select accordingly.

3. Using Wrong PAN Card

From April 1, 2021, having a PAN number is mandatory. But people often use their personal PAN for businesses that should use a company PAN, especially in case of private limited companies or LLPs.

 What to do:

  • Proprietors should use their personal PAN.
  • Other businesses must use the organization's PAN.

Important in 2025: Your PAN must be linked to Aadhaar, or the system may not allow you to continue.

  1. Wrong Investment or Turnover Details

The Udyam portal classifies your business as Micro, Small, or Medium based on your annual turnover and investment in plant and machinery or equipment.

Putting the wrong numbers can:

  • Classify your business wrongly.
  • Cause trouble during audits.
  • Lead to rejection of benefits.

 What to do:

  • Use actual data from your financial records or GST returns.
  • If you're a startup or haven't filed returns yet, provide estimated values — but be honest.

In 2025, the limits are:

  • Micro: Investment ≤ ₹2.5 crore, Turnover ≤ ₹10 crore
  • Small: Investment ≤ ₹25 crore, Turnover ≤ ₹100 crore
  • Medium: Investment ≤ ₹125 crore, Turnover ≤ ₹500 crore
  1. Incorrect NIC Code

NIC Code is a 5-digit code that tells the government what your business does (for example, clothing, IT services, food processing, etc.). Many people select the wrong NIC code or skip this step.

 What to do:

  • Check the official NIC code list on the Udyam website.
  • Choose the right code for your business.
  • You can add up to 10 codes if you have multiple activities.
  1. Fake or Inactive Mobile Number/Email

Some people use fake or inactive mobile numbers and email IDs just to register fast. But this becomes a big problem if you ever need to:

  • Recover your certificate
  • Make updates
  • Receive OTP for login

 What to do:

  • Use your own, working mobile number and email ID.
  • Avoid using an agent's contact details.
  1. Registering Multiple Times

Each business is allowed only one Udyam Registration Number. But some people try to register the same business again, thinking it's better — which is illegal.

What to do:

  • Register only once per business.
  • If you make a mistake, use the Update option, not a new registration.
  1. Not Updating After Changes

After registration, if your business changes its name, address, turnover, or type — you must update your Udyam certificate. Not updating it can cause issues during audits or while applying for schemes.

 What to do:

  1. Depending Entirely on Agents

 Using a consultant is fine, but some people hand over everything to agents and don't check anything. This can lead to incorrect details and even Aadhaar misuse.

 What to do:

  • Be involved in the process.
  • Check all details before submitting.
  • Ask for a copy of your certificate after registration.

 Note: you can update udyam certificate through udyam portal

Final Words

Udyam Registration is a powerful tool for small business owners in India. It gives you access to a world of benefits and support from the government. But simple mistakes can cause you delays, rejection, or even legal troubles.

By avoiding the common mistakes listed above, you can complete your Udyam Registration in 2025 easily, correctly, and with full peace of mind.

Quick Tips Recap:

  • Use correct Aadhaar & PAN
  • Know your business type
  • Enter honest financial details
  • Use your real mobile & email
  • Don't register more than once
  • Update your certificate if details change

Need help with Udyam Registration? You can reach out to trusted experts (like those at udyog-adhaar.in) for step-by-step assistance.