Published — January 19, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
More on enterprises: The Barangay Micro Business Enterprise (BMBE)
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MSME(s) stands for Micro, Small and Medium Enterprise (s)
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MSME refers to any business activity or enterprise engaged in industry, agribusiness and/or services
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The determination of what constitutes a Micro, Small and Medium Enterprise is based on its total assets
Micro, Small and Medium sized business are key to creating the 600 million new jobs needed by 2030 to keep pace with the growth of the world’s working age-population. – Amina J. Mohammed
Micro, Small and Medium Enterprises (MSMEs) are internationally recognized for their contribution to local and global economies. What are MSMEs?
The law says:
Micro, Small and Medium Enterprises (MSMEs) shall be defined as any business activity of enterprise engaged in industry, agribusiness and/or services, whether single proprietorship, cooperative, partnership or corporation whose total assets, inclusive of those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, must have falling under the following categories:
Micro: not more than Php 3, 000, 000. 00
Small: Php 3,000,001 – Php15, 000, 000. 00
Medium: Php15,000,00 – Php100,000,000.00
Based on the definition above, the determination of what constitutes a Micro, Small and Medium Enterprise is based on its total assets. These MSMEs are recognized by the government as having potential for more employment generation and economic growth that can help provide a self-sufficient industrial foundation for the country. MSMEs are eligible for government assistance.
What are the conditions before MSMEs may be eligible for government assistance?
The law says:
To qualify for assistance, counseling, incentives and promotion under the Magna Carta for Micro, Small and Medium Enterprises, MSMEs must be:
- duly registered with the appropriate government agency such as Department of Trade and Industry. However, in the case of micro enterprises, registration with the office of the municipal or city treasurer shall be deemed sufficient compliance with this requirement;
- one hundred percent (100%) owned, capitalized by Filipino citizens, whether single proprietorship or partnership. If the enterprise is a juridical entity such as a corporation, at least sixty percent (60%) of its capital or outstanding stock must be owned by Filipino citizens;
- a business activity within the major sectors of the economy, namely; industry, trade, services including the practice of one’s profession, the operation of tourism-related establishments, and agri-business, or any activity involving the manufacturing, processing, and/or production of agricultural produce.
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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