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How can your business be eligible for the above benefits – procedure 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 (a list of services notified can be accessed here). 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:


Type Service Sector Manufacturing sector
Micro Investment in equipment must not exceed INR 10 lakhs Investment in plant and machinery must not exceed INR 25 lakhs
Small Investment in equipment must be more than INR 10 lakhs but less than INR 2 crores Investment in plant and machinery must be more than INR 25 lakhs but less than INR 5 crores
Medium Investment in equipment must be more than INR 2 crores but less than INR 5 crores Investment in plant and machinery must be more than INR 5 crores but less than INR 10 crores

Note: Cost 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).

Registration of an enterprise as a micro, small or medium enterprise engaged in providing services or manufacture of goods requires filing an Entrepreneur’s Memorandum (EM) with the General Manager, District Industries Centre of the area concerned (or a district level officer of similar rank in the Directorate dealing with Micro, Small and Medium Enterprise of the State Department or the Union Territory Administration) (DIC). Upon filing of Part I of the EM, the District Industries Centre shall allot an EM number and also issue an acknowledgement.[1] New businesses (which have not commenced operations) are required to file Part I, and follow it up by filing Part II once they start production or rendering services. Part II must be filed within 2 years of filing Part I, otherwise the Part I filing shall be considered invalid. Existing businesses are only required to file Part II of the EM.

In case of change of products manufactured or services offered, the enterprise must inform the District Industries Centre in writing within three months of the change.

The forms of the EM can be downloaded from the Directorate of Industries in the concerned state and can also be obtained from the District Industries Centres.

Schedule II, Ministry of Small Scale Industries Notification S.O. 1643(E), Format of Entrepreneurs Memorandum, Gazette of India, 29th of September, 2006

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