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Eligibility for Registration

For a company to get a registration under the MSMED Act, it must qualify as a micro, small and medium enterprise (MSME) as defined under the Act. The definition of enterprise is very broad under the MSMED Act, and includes business concerns, undertakings, proprietorships, association of persons, co-operative societies, partnership firms or any other establishment, engaged in

i) manufacture or production of goods pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951; or

ii) providing services[1]. Note that registration is discretionary, that is, as per the wish of the enterprise and not mandatory. However, it is strongly advisable that the SMEs that qualify for MSMED registration should do so.


Whether the entity is classifiable as a micro, small or medium enterprise depends on the basis of investment. There are separate thresholds for investment in manufacturing and service based enterprises, as shown below:


NoteCost of pollution control, research and development, industrial safety devices, etc. are not considered in calculating the investment in plant and machinery. The entire list of excluded items is mentioned in a notification by Ministry of Small Scale Industries (S.O. 1722 (E) dated 16 January, 2009).

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