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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.
AT A GLANCE
- Micro, small and medium enterprises increase income for poor households and build both business equity and personal assets over a period of time.
Fostering national development, promoting inclusive growth, and reducing poverty are included in the declared policy of the State. These can be achieved by encouraging the establishment of micro, small and medium enterprises (MSMEs) that facilitate local job creation, production and trade in the country.
MSMEs increase income for poor households and build both business equity and personal assets over a period of time. Thus, the law says:
To this end, the State shall develop plans and initiate means to ease the constraints on the establishment of MSMEs in order to rationalize the existing bureaucratic regulations, providing greater incentives and benefits to MSMEs, and strengthening the Micro, Small and Medium Enterprise Development (MSMED) Council. (Section 2, Republic Act No. 10644 also known as the Go Negosyo Act)
What is a Micro Small Medium Enterprise?
Micro, Small and Medium Enterprise is any business activity or 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 value falling under the following categories:
|
Micro |
not more than P3,000,000 |
|
Small |
P3,000,001 – P15,000,000 |
|
Medium |
P15,000,001 – P100,000,000 |
Who shall review the abovementioned total assets?
The law says:
The above definitions shall be subject to review and adjustment by the Micro, Small and Medium Enterprises Development (MSMED) Council under Section 6 of this Act or upon recommendation of sectoral organizations concerned, taking into account inflation and other economic indicators. The Council may use other variables such as number of employees, equity capital and assets size.
The Council shall ensure that notwithstanding the plans and programs set for MSMEs as a whole, there shall be set and implemented other plans and programs varied and distinct from each other, according to the specific needs of each sector, encouraging MSMEs to graduate from one category to the next or even higher category. (Section 3, Republic Act No. 9501 also known as the Magna Carta for Micro, Small and Medium Enterprises)
What are the functions of the Micro, Small and Medium Enterprise Development Council?
The law says:
SEC. 7. Micro, Small and Medium Enterprise Development (MSMED) Council. — The existing Small and Medium Enterprise Development Council, which was created by Republic Act No. 6977, as amended by Republic Act No. 8289, shall be strengthened to effectively spur the growth and development of MSMEs throughout the country, and to carry out the policy declared in this Act and shall now be known as the Micro, Small and Medium Enterprise Development (MSMED) Council. The Council shall be attached to the Department of Trade and Industry and shall be constituted within sixty (60) days after the approval of this Act. (Section 7, Republic Act No. 9501)
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