What is meant by MSME
MSME stands for Micro, Small, and Medium Enterprises. It was introduced by the Government of India in agreement with the MSMED (Micro, Small, and Medium Enterprises Development) Act of 2006. As per this act, MSMEs are the enterprises involved in the processing, production, and preservation of goods and commodities.
What is the MSME limit
For Micro Enterprises
Investment: Less than 1 crore INR
Turnover: Less than 5 crore INR
For Small Enterprises
Investment: 1-10 crore INR
Turnover: 1-25 crore INR
For Medium Enterprises
Investment: 10-50 crore INR
Turnover: 25-250 crore INR
Now how do a person benefit from MSME
One can avail collateral free bank loans.
One can easily avail government tenders.
Payments from the parties is ensured.
What are the types of MSMEs
According to the provisions of the MSMED (Micro, Small & Medium Enterprises Development) Act of 2006, MSMEs are classified into two classes.
Manufacturing Enterprises
Service Enterprises
The enterprises are further categorized based on annual turnover and investment in equipment.
After registration under MSME which is also known as Udhyam Aadhar Number a person gets UAM Number. UAM is a registration form that constitutes a self-declaration format under which the MSME will self-certify its existence, bank account details, promoter/owner’s identity details, and other information required. There is no fee for filing the UAM number.
You are eligible for MSME if your business is a micro or small enterprise as per the MSME Act. This means your investment and turnover should be below certain limits.
