The Memorandum of Micro, Small and Medium Enterprises (MSME) is a document that is filed by an entrepreneur who intends to establish or has already established a micro, small or medium enterprise (MSME). The memorandum contains information about the enterprise, such as its name, location, type of activity, investment, and turnover.
The MSME Act 2006 defines the following three categories of MSMEs:
- Micro enterprise: An enterprise where the investment in plant and machinery or equipment does not exceed one crore rupees and turnover does not exceed five crore rupees.
- Small enterprise: An enterprise where the investment in plant and machinery or equipment does not exceed ten crore rupees and turnover does not exceed fifty crore rupees.
- Medium enterprise: An enterprise where the investment in plant and machinery or equipment does not exceed fifty crore rupees and turnover does not exceed two hundred and fifty crore rupees.
The MSME Act 2006 requires all MSMEs to file a memorandum with the appropriate authority. The authority with which the memorandum shall be filed by a medium enterprise shall be such as may be specified, by notification, by the Central Government. The State Government shall, by notification, specify the authority with which a micro or small enterprise may file the memorandum.
The following are the contents of the memorandum:
- Name of the enterprise
- Address of the enterprise
- Type of activity to be undertaken by the enterprise
- Investment in plant and machinery or equipment
- Turnover
- Name and address of the owner(s) or promoter(s) of the enterprise
- Any other information that may be required by the authority with which the memorandum is filed.
MCQs on Memorandum of Micro, Small and Medium Enterprises
- Which of the following is not a requirement of the MSME Act 2006 for filing a memorandum by an MSME?
- Name of the enterprise
- Address of the enterprise
- Type of activity to be undertaken by the enterprise
- Investment in plant and machinery or equipment
- Turnover
- The correct answer is turnover. The MSME Act 2006 does not require the turnover to be mentioned in the memorandum.
- The authority with which the memorandum shall be filed by a medium enterprise shall be such as may be specified, by notification, by the __________.
- Central Government
- State Government
- The correct answer is Central Government. The MSME Act 2006 gives the Central Government the power to specify the authority with which the memorandum shall be filed by a medium enterprise.
- The following are the contents of the memorandum, except __________.
- Name of the enterprise
- Address of the enterprise
- Type of activity to be undertaken by the enterprise
- Investment in plant and machinery or equipment
- Any other information that may be required by the authority with which the memorandum is filed
- The correct answer is Any other information that may be required by the authority with which the memorandum is filed. This is not a mandatory requirement of the MSME Act 2006.