Welcome to a brief presentation on the salient features of MSMED Act, 2006

NEED FOR A NEW LAW To have a single legislation To have an Apex Consultative Body To have a statutory basis to Policies To strengthen laws to check delayed payments To provide statutory basis to credit facility To simplify registration process To define MSME concept To promote the service sector To facilitating closure

M ICRO S MALL And M EDIUM E NTERPRISES D EVELOPMENT ACT 2006

Earlier concept of "INDUSTRIES" Has been changed to "ENTERPRISES"

Micro Small & Medium Enterprises have been defined In terms of investment (excluding Land & Building) in Plant & Machinery ( for Manufacturing / Production sector) & Equipment (for Service sector)

Classification of Enterprises Enterprises Manufacturing MICRO 25 LAKH (Plant & Machinery) SMALL 25 TO 500 LAKH (Plant & Machinery) MEDIUM 500 TO 1000 LAKH (Plant & Machinery) Services MICRO 10 LAKH (Equipment) SMALL 10 TO 200 LAKH (Equipment) MEDIUM 200 TO 500 LAKH (Equipment)

Earlier Process of “REGISTRATION " Has been replaced with “FILING OF MEMORANDA"

Earlier Registration of “PROVISIONAL” & “PERMANENT ” Has been replaced with Filing of EM “PART - I ” & “PART - II ”

Filing of Memoranda by MSMEs Enterprises Manufacturing MICRO Optional SMALL Optional MEDIUM Mandatory Service MICRO Optional SMALL Optional MEDIUM Optional

Filing of Memoranda by MSMEs Process of two- stage registration is replaced with filing of memoranda in two parts Filing of memoranda is optional for all Micro and small Enterprises Filing of memoranda is optional for service sector medium Enterprises Contd..

Filing of memoranda is mandatory for manufacturing sector medium Enterprises Forthcoming units may file Entrepreneurs Memoranda Part I Existing units may file Entrepreneurs Memoranda Part II Filing of Memoranda by MSMEs

Earlier non-statutory “SSI BOARD " Has been replaced with statutory “NATIONAL BOARD"

National Board  Is the Apex Consultative Body  It is a Statutory Body  Quarterly meeting of the Board is Mandatory Contd..

National Board Contd.. Head : Central Minister of MSMEs Members: MPs, Reps of Central Ministries, State Govts, UT Admn, RBI, SIDBI, NABARD, Assn of MSMEs, Central Trade Union Organisations, Persons of eminence etc.

Functions of National Board Examine the factors affecting the promotion & development of MSMEs Review the policies & programmes Make recommendations Advice the Govt. on the use of funds

Advisory Committee Head : Central Govt.Secretary of MSMEs Members: Not more than five officers of Central Govt. Not more than three reps. of State Govt. Reps. One each from the Assn. of Micro, Small, Medium Enterprises

Functions of Advisory Committee Examine the matters referred by the National Board Advice the Central Govt. on matters in the specified clauses Advice the State Govt. on matters in the rules in the specified clauses

Promotional & Enabling Provisions Programmes for promotion & development of MSMEs One or more funds for MSMEs Central Govt. shall administer, coordinate & ensure the utilisation of funds

Credit The policies for credit to MSMEs shall be with the aim of: Ensuring smooth credit flow to the MSMEs Minimising sickness among MSMEs Ensuring enhancement of competitiveness

Procurement Policies Provision for preference policies for the procurement of goods / services of Micro & Small Enterprises

Delayed Payments Laws strengthened MSE Facilitation Council is mandatory Inclusion of reps of MSE Assn in the council Jurisdiction area of state council is not restricted for the location of buyers Facilitation Council can utilise the service of any institution / centre Payment period to MSEs reduced to 45 days Rate of interest on dues increased to 3 times Contd..

Delayed Payments - Laws strengthened Contd.. Decision by the Council within 90 days Annual statement of A/c of buyer should declare payment outstanding to MSE Interest paid/payable disallowed for deduction for IT purposes. No appeal without deposit of 75% of decreed amount. Appellate court shall order payment of a part of deposit to the supplier

Kerala Micro and small Enterprises Facilitation Council Rules The council shall consists of the following Members  Director of Industries & Commerce – Chairperson  Convener, SLBC / DGM, Lead Bank  President / Secretary KSSIA  MD, SIDCO  An officer not below the rank of Deputy Secretary, Law Department, GOK Contd..

Kerala Micro and small Enterprises Facilitation Council Contd.. TThe Council shall meet at least once a month AAt least seven days notice shall ordinarily be given for any meeting of the Council. IIn case of any urgency meeting can be called by the Chairperson with short notice FFor any meeting the Chairperson and at least two members are to be present.

Closure of Business Centre Govt. may notify a scheme for facilitating closure of a business by a Micro, Small or medium enterprises.

Notifications/Rules issued by the Governments  Constitution of National Board by GOI  Constitution of Advisory Committee by GOI  Rules of Kerala Micro and Small Facilitation Council by GOK  General Manager, DIC as the authority for EM filing

Facilities  Down loadable forms for EM from the website     Forms for EM in Malayalam in near future  On-line filing of Memorandum in near future

THANK YOU