MSMED stands for Micro, Small and Medium Enterprises. In order to create more accountability and to support these industries, Government of India has classified them into a category known as MSME, based on certain thresholds. All the organizations, who want to avail the benefits available to such enterprises shall need to follow a registration procedure to get itself registered under MSMED Act. All forms of organizations such as proprietorship firms, LLPs, public and private limited companies can get itself registered as MSME.
Following are the thresholds based on which, the organizations are classified into Micro, Small and Medium enterprises:
Category |
Investment in Plant & Machinery does not exceed |
|
For Manufacturing sector |
For Service sector |
|
Micro enterprises |
Rs. 25 lakhs |
Rs. 10 lakhs |
Small enterprises |
Rs. 5 crores |
Rs. 2 crores |
Medium enterprises |
Rs. 10 crores |
Rs. 5 crores |
Procuring the documents and other details from the client.
Drafting the application to be filed along with the details about nature of the industry.
Submission of the application along with the documents with the Regulatory Authority.
Obtaining the certificate of Registration as MSMED
No. It is not mandatory to obtain the MSMED certificate. However, in order to avail benefits under MSMED Act, it is necessary to register under MSMED Act.
MSMED certificate/ registration has lifetime validity.
Only the investment made by the entity in Plant and Machinery original cost (excluding land and building and furniture, fittings and other items not directly related to the goods sold/ service rendered) shall be considered while calculating the investment for the purpose of checking the eligibility of the organization as MSMED.
The buyers are liable to pay the dues within 45 days otherwise they shall be liable to pay the interest. Further, banks provide such organization with high sanction limits at reasonable interest rates.