In the early days of business, entrepreneurs generally look for a for a license to get their business recognized by the government. One of the easier registrations that are to be granted is the MSME Registration or SSI registration or the Micro, Small & Medium Enterprises Registration or Small Scale Industries Registration. This is not the only reason as to why this kind of registration is popular among new businesses but it’s also because this registration also gives access to numerous benefits.
Obtaining MSME registration or the Udyog Aadhaar is not mandatory and it is at the sole discretion of the Entrepreneur. However, it is recommended that most of the businesses should obtain MSME registration right after the registration in order to enjoy various benefits like protection against delayed payments under the MSMED Act. However, the Registration eligibility for MSME registration for enterprises depending upon their scale of business is as follows:
- Micro Enterprises: These are the smallest entities, Micro manufacturing enterprises who have the investment of less than Rs. 25 lakh in plant and machinery, while the micro service enterprises have less than Rs. 10 lakh invested in equipment.
- Small Enterprises: These are the small manufacturing enterprises whose investment in plant and machinery is between Rs. 25 lakh and Rs. 5 crores , while the small service enterprises may have between Rs. 10 lakh and Rs. 2 crores invested in equipment.
- Medium Enterprises: Medium manufacturing enterprises invest between Rs. 5 crore and Rs. 10 crores in plant and machinery, while the small service enterprises invest between Rs. 2 crore and Rs. 5 crores in equipment.
For the manufacturing entities, however, land and building cannot be counted towards the total investment. Also, since the original cost of the equipment and plant and machinery is taken into account; the depreciation cannot be factored in. However, any business entity may apply, be it a partnership or a company and the Sole proprietorship may also apply.
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