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MSME stands for Micro, Small and Medium Enterprises and is regulated through The Micro, Small and Medium Enterprises Development Act, 2006. It is also referred to as Udyog Aadhar.

MSME was introduced to facilitate the promotion and development and enhancing the competitiveness of micro, small and medium enterprises in India. The motive is to boost entrepreneurship spirit in India and help them overcome the constraints surfacing the startups. It aims at getting micro, small and medium enterprises on board and at par with stiff and cut throat competition it faces.


Enterprises under this are classified into Micro, Small and Medium on the following Basis

Enterprise Type Basis of Classification Micro Small Medium
Enterprise engaged in manufacturing or production of goods Investment in Plant and Machinery Does not exceed INR 25 Lakhs More than INR 25 Lakhs but less than INR 5 Crore More than INR 5 Crore but less than INR 10 Crore
Enterprise engaged in rendering service Investment in equipment Does not exceed INR 10 Lakhs More than INR 10 Lakhs but less than INR 2 Crore More than INR 2 Crore but less than INR 4 Crore

Benefits of MSME registration

  • Easy financing to MSMEs and lower interest rates. Progressive credit practices & policies to ensure timely and smooth flow of credit
  • Preferences given to procure goods and services produced and provided by MSME
  • Various grants are given by Central Government to MSME
  • Protection against the delayed payments by buyers. When a MSME registered enterprise supplies any goods or renders any services to a buyer, the buyer is required to make the payment on or before the date agreed upon by them and in no case no the period can exceed 45 days from the date of acceptance
  • Delayed payment by buyers of MSME products/services results in interest penalties.

Documents for MSME Registration

  • Address proof of entity
    • In case of owned property – Sale deed/Index II or property tax receipt or latest utility bill
    • In case of rented or leased premises – Rental/Lease agreement and latest utility bill along with NOC from owner
  • Copies of sale and purchase invoices
  • Copy of license granted, if any
  • Copies of purchase and installation invoices of equipment or plant and machinery
  • Registration/Incorporation certificate
    • In case of firm – Partnership deed
    • In case of company – Certificate of Incorporation, MOA, AOA, copy of board resolution authorizing MSME registration and director to sign such application

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