MSME Definition

MSME Definition

MSME Stands for Micro, Small & Medium Enterprises. In accordance with the provision of  Micro, Small & Medium Enterprise Development Act 2006,  The Micro Small & Medium Enterprises are divided into two Categories : 

(1) Manufacturing Enterprises :-  Manufacturing Enterprises are those Enterprises which are engaged in the manufacture or production of goods or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use.

(2) Service Enterprises :- Service Enterprises are those enterprises which are engaged in providing or rendering service.

MSME Definition:

MSME enterprise shall be classified as a micro, small or medium enterprise on the basis of the Investment in Plant & Machinery or Equipments as follows :- 

(i) Micro Enterprise –  A Micro enterprises is a enterprise, where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees;

(ii) Small Enterprise – A small enterprise is a enterprise, where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees; and

(iii) Medium Enterprises – A medium enterprise is a enterprise, where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.

Important to note the limits defined for each category of MSME Entyerprise is the higher limit so if any limit breach then it will automatically considered into higher category. Here entity’s segregation on the basis of its nature has been removed which gives more relaxed & simple understanding of a business house. In other words complexity of category has been abolished. 

 

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