Enterprises are classified into micro, small and medium enterprises under the MSMED Act. It is a Central Act coming under the purview of the Ministry of Micro, Small and Medium Enterprises of the Government of India. However registrations under MSMED Act are done only by the respective State Governments through the District Industries Centre.
In the case of an enterprise engaged in rendering of services, the classification under the MSMED Act will be made on the basis of the investment the enterprise has made in Equipment (Investment). If the Investment does not exceed Rs.10 Lakhs, the enterprise is a MICRO ENTERPRISE. If the Investment is more than Rs.10 Lakhs but does not exceed Rs.200 Lakhs, the enterprise is a SMALL ENTERPRISE. If the Investment is more than Rs.200 Lakhs but does not exceed Rs.500 Lakhs, the enterprise is a MEDIUM ENTERPRISE.