Micro, Small and Medium Enterprises (MSME) are classified in two Classes under Micro, Small & Medium Enterprises Development (MSMED) Act, 2006:

1. Manufacturing Enterprises
   The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation) Act, 1951) or employing plant and machinery in the process of value addition to the final product having a distinct name or character or use. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery.
2. Service Enterprises
   The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment..

The limit for investment in plant and machinery / equipment for manufacturing / service enterprises, as notified, vide S.O. 1642(E) dtd.29-09-2006 are as under

Manufacturing Sector
Enterprises	Investment in plant & machinery
Micro Enterprises	Does not exceed twenty five lakh rupees
Small Enterprises	More than twenty five lakh rupees but does not exceed five crore rupees
Medium Enterprises	More than five crore rupees but does not exceed ten  crore rupees
Service Sector
Enterprises	Investment in equipments
Micro Enterprises	Does not exceed ten lakh rupees:
Small Enterprises	More than  ten lakh rupees but does not exceed two crore rupees
Medium Enterprises	More than two crore rupees but does not exceed five core rupees

Benefits of Registration as MSME (Udyog Aadhar)

1. Protection against delay in payment.
2. Fast resolution of disputes
3. Collateral Free loans from bank
4. Exclusive consideration for participating in international trade fair
5. Octroi benefits
6. Waiver of Stamp duty and Registration fees
7. Several Exemption under Direct Tax Laws
8. Barcode registration subsidy
9. Subsidy on NSIC Performance and Credit ratings
10. Counter Guarantee from GoI through CGSTI
11. Reduced rate of interest from banks
12. 15% subsidy under CLCSS scheme for technology upgradation
13. Exemptions while applying for Government tenders
14. Concession in Electricity Bills
15. Reimbursement of payment made for obtaining ISO certification
16. 1% exemption in interest on OD
17. Increasing eligible loan limit for optimal reasons, from the amount of Rs. 25 lakh to Rs. 50 lakh
18. Raising the extent of guarantee cover from 75 % to 80 %
19. Reservation of products for exclusive manufacturing by MSME/SSI
20. Easier registration and approvals to obtain Licenses
21. Eligible for IPS subsidy
22. Preference in allocation of Government tenders
23. Excise Exemption Scheme
24. Reduced rate of interest from banks
25. 50% subsidy for patent registration