What are the criteria of MSME?


In this day and age, most registrations can be handled online as well as through offices, initially coordinating the process. In the same fashion, companies and businesses can get through the registration process for MSMEs through the online platform or directly in person. People are also allowed to understand the process using the online platform, and they can choose whether they want to handle it online or in person.

What is MSME?
The Ministry of Micro, Small and Medium Enterprises are a branch of the Government of India. They are an apex executive body for the formulation and administration of rules, regulations and laws relating to micro, small and medium enterprises in India. Most businesses, when they are coming up, would at some stage fall within this category.

Additionally, there are various benefits to registering as an MSME. Some of these are listed below:

  • Collateral-Free Loan Facilities & Priority Lending
  • Credit Linked Capital Subsidies for MSMEs
  • Low-Interest rate on loans
  • ISO Certification Charges Reimbursement
  • Incubation Scheme For MSME
  • Market Development Assistance Scheme for MSME
  • Subsidy on Patent Registration
  • Protection against Delayed Payments
  • 100% tax exemption for Innovative startups
  • Concessions on Electricity Bills
  • Tender Preference to MSME
  • Prime Minister Employment Generation Programme for MSMEs

Ideally, these benefits have been put into place to assist smaller companies in keeping up with larger ones. Starting up is usually quite challenging, especially for the companies that are going up against competitors who have been around for a long time and got an advantage over others in the market.

When it comes to the criteria for registration, all companies that are planning on scaling can begin registering themselves to get through the process. There are two categories that registrations for the MSME have to take place in, and companies have to classify themselves as either a service-based company or a product creating company.

MSME enterprises involved with the manufacturing sector would fall under specific categories based on the amount invested in plant and machinery

  • Micro enterprises– Entities investing less than ₹ 25 lakhs in plant and machinery
  • Small enterprises– Entities investing between ₹ 25 lakhs and ₹ five crores in plant and machinery
  • Medium enterprises– Entities investing between ₹ 5crores and ₹ ten crores in plant and machinery

MSME enterprises dealing in the services sector are categorized based on the amount invested in equipment

  • Micro enterprises– Entities investing less than ₹ ten lakhs
  • Small enterprises– Entities investing more than ₹ ten lakhs but less than ₹ two crores
  • Medium enterprises– Entities investing ₹ two crores but less than ₹ five crores

As for the documents that they need to get through the registration process, they are not difficult to come by. Furthermore, most businesses would have to use the same ones when they were getting through the establishment process:

  • Business Address Proof
  • Copies of Sale Bill and Purchase Bill
  • Partnership Deed/ MoA and AoA
  • Copy of Licenses and Bills of Machinery Purchased