Startup vs MSME: What's the difference ?

Startup

A startup is defined as an organisation to develop a repeatable and scalable business model. Startups typically pursue novel ideas that has the potential to generate larger employment, productivity improvements, transformational technologies to drive economy, lifestyles.

Legal definition from The Ministry of Commerce and Industry, Government of India, a Startup is

1. The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
2. Turnover should be less than Rs. 100 Crores in any of the previous financial years
3. An entity shall be considered as a startup up to 10 years from the date of its incorporation
4. The Startup should be working towards innovation / improvement of existing products, services and processes and should have the potential to generate employment and / or wealth creation. An entity formed by splitting up or reconstruction of an existing business shall not be considered a 'Startup'

MSME

An MSME (Micro, Small and Medium Enterprises) is an " independently owned and operated enterprise, designed for profit and sells known products to known customers in local markets ".

The MSMEs are further sub-divided into a Manufacturing and Service Enterprises. For manufacturing, the investment ranges from Rs. 0 to Rs. 10 crores, and in the case of Service enterprise, the investment varies from Rs. 0 to Rs. 5 crores.

Check more on upcoming new definition of MSME @ new definition

A business needs to register as MSME to get the benefits provided by the Ministry of Commerce in availing skill development and training, long and medium term loans, working capital loans, seed loans, and bridge loans.