What is MSME?

MSME stands for micro, small and medium enterprises, and these are the backbone of any developing economy. To support and promote MSMEs, the Government of India through various subsidies, schemes and incentives promote MSMEs through the MSMED Act. To avail, the benefits under the MSMED Act from the Central or State Government and the Banking Sector, Udyog Aadhar or MSME Registration is required.

Clarifications of MSME:

The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will accordingly be amended to define units producing goods and rendering services in terms of annual turnover as follows:
  • A micro enterprise will be defined as a unit where the annual turnover does not exceed Rs 5 crores;
  • A small enterprise will be defined as a unit where the annual turnover is more than Rs 5 crore but does not exceed Rs 75 crore;
  • A medium enterprise will be defined as a unit where the annual turnover is more than Rs 75 crore rupees but does not exceed Rs 250 crore.
  • Additionally, the Central Government may, by notification, vary turnover limits, which shall not exceed thrice the limits specified in Section 7 of the MSMED Act.
Classification of the MSME New Classification (annual turnover)
Micro Not exceeding Rs 5 crores
Small Between Rs 5 crores to Rs 75 crores
Medium Rs 75 to Rs 250 crores

Introducing our MSME Interest Calculator – a quick and accurate tool to compute delayed payment interest. Enter your invoice details and get instant results, even for older invoices. Click Here to try now.

MAJOR BENEFIT OF MSME UNITS

  • Bank Loans (Collateral Free)
  • Protection against Payments (Delayed Payments)
  • Subsidy on Patent Registration
  • Overdraft Interest Rate Exemption
  • Industrial Promotion Subsidy Eligibility
  • Fewer Electricity Bills
  • ISO Certification Charges Reimbursement
  • Tax Rebates
  • Government Tenders

DOCUMENTS / INFORMATION REQUIRED FOR REGISTRATION

  • Nature of Business
  • National Industrial Classification Code (NEC code is a number classifying the product or service; multiple options can also be chosen)
  • Persons employed
  • Investment in Plant and Machinery (for manufacturing units)
  • Investment in Equipment (for service sector units)
  • Location of the plant(s)