Know Law
Labz Notification 5 of 2011
A written-cum-video initiative to know your corporate legal position as on date
Legal Queries??
Who can get benefits of Micro or Small Enterprises (MSE’s) or Small Scale Industries (SSI’s)? Whether MSE’s are allowed for additional privileges? What is the Percentage for foreign investments allowed into MSE's? Do you wish to protect your business by registering as a Micro or Small Enterprise (Small Business)!!! What are forms of business organizations which can be registered as Micro or Small Enterprises? Why to register my business as MSE or SSI in India and what are the benefits?
Solution…
Setting up an unit as Micro or Small Enterprises
SSI and MSE means the same and it can be registered under a special Act namely Micro, Small and Medium Enterprises Development (MSMED) Act which in turn protects such units from getting exploited by big units like Medium or Large enterprises. Certain items are reserved exclusively for the manufacturing of such units like pickles, chutneys, bread, mustard & groundnut oils, wooden furniture’s, steel furniture’s & steel almirah/cupboards, stainless steel & aluminum utensils, exercise books & registers, wax candles, laundry soap, safety matches, fireworks, agarbatties, glass bangles and padlocks. However, it does not restrict such units to only manufacture these items. It can produce other products too. Read More...
Requirement under Indian laws on Setting up an unit as Micro or Small Enterprises:
i. A micro enterprise can be a manufacturing unit where the investment in equipment is UPTO Rs. 25 lakhs (Rs.10 lakh for Service units);
ii. A small enterprise can be a manufacturing unit where the investment in equipment is BETWEEN Rs. 25 lakhs & Rs. 5 crores (Rs. 10 lakh to Rs. 2 crores for Service units); and
iii. Any person such as proprietorship, Partnership, LLP or Company can be registered as a Micro or Small Enterprise (which was earlier call Small Scale Industries under Industrial laws).
As a company or an LLP in India registered as a Micro or Small Enterprise, you need to ensure Initial compliances and Subsequent compliances at all times apart from registering under import/export laws, tax laws, labour laws and Export Promotion Councils.
Myth buster on Setting up a unit as Micro or Small Enterprises:
A foreigner can start a manufacturing or service unit as Micro or Small Enterprise in India as 100% of foreign investment is FREELY allowed under Foreign Exchange Management Act (FEMA) through Automatic route with mere procedural reporting requirements. However, if the foreign entity is a Medium or Large Enterprise in India, it shall get Foreign Investment Promotion Board’s approval in certain cases.
Caution (or benefit) point on Setting up a unit as Micro or Small Enterprises!!!
Setting up a company or LLP as a Micro or Small enterprise offers wide range of benefits to entrepreneurs and industries from different arenas as Central Government of India devises schemes exclusively for the benefit of this class of industries. Right from liberalization of FEMA requirements, Company laws, mandatory procurement by Government, giving a double weightage to get recognized as an Export house and reserving items exclusively for the manufacture of such units, Indian Government goes way beyond to ensure collection of payments on time and more.
WATCH LAWLABZ VIDEO on Setting up a unit as Micro or Small Enterprises (Click Here):
At Lawlabz, we offer 360O Personalized VIRTUAL Corporate Solutions by offering COMPLETE online legal support for your organization since its set-up as your entrepreneurial venture, during its management as a corporate entity or a manufacturing industry and closure of unwanted company’s which are not having any significant business of its own.
Legally Yours,
Happy Consulting with www.lawlabz.com
For Private Circulation Only. The copyright of this notification is retained by Lawlabz. Notwithstanding anything contained herein, this notification does not amount to opinion or consultation of any nature. One Pager
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