MSME stands for Micro, Small & Medium Enterprises. However the definitions of these enterprises can vary according to manufacturing or service sector. For manufacturing sector, micro enterprises are those whose turnover does not exceed 25 lakh rupees, small enterprises are those whose turnover is between 25 lakhs and 5 crore rupees & medium enterprises are those which have turnover between 5 Crore and 10 Crore rupees.

For the service sector, micro enterprises are those whose turnover does not exceed 10 lakh rupees, small enterprises are those whose turnover lies between 10 lakh rupees & 2 crore rupees & medium enterprises have their turnover between 2 crore rupees and 5 crore rupees. Under MSME registration as well, various other registrations are required such as Service Tax Registration or VAT registration.

Criteria for MSME’s

  • For manufacturing sector, micro enterprises are those whose turnover does not exceed 25 lakh rupees, small enterprises are those whose turnover is between 25 lakhs and 5 crore rupees & medium enterprises are those which have turnover between 5 Crore and 10 Crore rupees.
  • For the service sector, micro enterprises are those whose turnover does not exceed 10 lakh rupees, small enterprises are those whose turnover lies between 10 lakh rupees & 2 crore rupees & medium enterprises have their turnover between 2 crore rupees and 5 crore rupees.

Documents required for MSME Registration

  • Passport size photographs of partners/proprietors/directors
  • Copy of partnership deed (MoA & AoA)
  • Proof of legal possession such as NOC from landlord, rent receipt etc.
  • Provisional Registration in approved Industrial areas

Procedure for MSME Registration

A Medium enterprise engaged in the manufacture or production of goods has to compulsorily register (under the MSMED Act). For other Enterprises the registration is optional.

FAQs :

MSME registration certifies the enterprises to show them as micro, small or medium enterprise. Government have different schemes and tax benefits for each type of classification. To avail the benefits MSME registration is mandatory. For MSME registration enterprise must enrol their name under the MSMED act, 2006..

a. Sole proprietorships

b. Partnership firms

c. LLPs

d. Private limited companies

e. HUFs

The MSMED Act divides the MSMEs into two categories:

a. Enterprises engaged in manufacturing or production

b. Enterprises engaged in providing services.

For manufacturing entities:

Type of Unit Investment in Plant and Machinery
Micro enterprises Not more than Rs 25 lakhs
Small enterprises INR 25 lakhs to INR 5 crores
Medium enterprises INR 5 crores to INR 10 crores

For service provider entities:

Type of Unit Investment in Plant and Machinery
Micro enterprises Not more than Rs 25 lakhs
Small enterprises INR 10 lakhs to INR 2 crores
Medium enterprises INR 2 crores to INR 5 crores

Cheaper bank loans

Easy access to credit

Quicker approvals from state and central government bodies

Tax rebates

Cheaper infrastructure

Access to tenders

MSME registration is not yet made mandatory by the government but it is beneficial to get one's business registered under this because it provides a lot of benefits in terms of taxation, credit facilities, loans etc.

No, the MSME registration process is a complete online process.

MSME registration is first provided as a provisional registration certificate with a validity of 5 years. Once the unit has commenced production, a permanent registration certificate is issued which is valid for the lifetime of the entity.


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