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An engineering workshop has Rs. 8 crore invested in plant and machinery and an annual turnover of Rs. 40 crore. Using the MSMED Act, 2006 criteria reproduced in the lesson (with effect from 01-07-2020), how is it classified?
Answer & Solution
Correct answer: B.
1. Micro caps are Rs. 1 crore P&M and Rs. 5 crore turnover.
2. Small caps are Rs. 10 crore P&M and Rs. 50 crore turnover.
3. The workshop is inside both small thresholds and above the micro thresholds.
4. So it falls in the small enterprise bucket; not medium, since both indicators are below Rs. 50 crore.
_Source: ICSI CS Executive Paper 3 (Setting up of Business Entities and Closure) — Lesson 1: Choice of Business Organisation, pp. 2-11._
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