Section 2 — Definitions.

2. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “Advisory Committee” means the committee constituted by the Central Government under 

sub-section (2) of section 7; 

(b) “appointed day” means the day following immediately after the expiry of the period of fifteen 

days from the day of acceptance or the day of deemed acceptance of any goods or any services by a 

buyer from a supplier. 

Explanation.—For the purposes of this clause,— 

(i) “the day of acceptance” means,— 

(a) the day of the actual delivery of goods or the rendering of services; or 

(b) where any objection is made in writing by the buyer regarding acceptance of goods or 

services within fifteen days from the day of the delivery of goods or the rendering of services, 

the day on which such objection is removed by the supplier; 

(ii) “the day of deemed acceptance” means, where no objection is made in writing by the 

buyer regarding acceptance of goods or services within fifteen days from the day of the delivery 

of goods or the rendering of services, the day of the actual delivery of goods or the rendering of 

services; 

(c) “Board” means the National Board for Micro, Small and Medium Enterprises established 

under section 3; 

(d) “buyer” means whoever buys any goods or receives any services from a supplier for 

consideration; 

                                                           
1. 2nd October, 2006, vide notification No. S.O. 1154(E) dated 18th July, 2006, see Gazette of India, Extraordinary Part II 

sec.3(ii). 



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(e) “enterprise” means an industrial undertaking or a business concern or any other establishment, 

by whatever name called, engaged in the manufacture or production of goods, in any manner, 

pertaining to any industry specified in the First Schedule to the Industries (Development and 

Regulation) Act, 1951 (55 of 1951) or engaged in providing or rendering of any service or services; 

(f) “goods” means every kind of movable property other than actionable claims and money; 

(g) “medium enterprise” means an enterprise classified as such under sub-clause (iii) of clause (a) 

or sub-clause (iii) of clause (b) of sub-section (1) of section 7; 

(h) “micro enterprise” means an enterprise classified as such under sub-clause (i) of clause (a) or 

sub-clause (i) of clause (b) of sub-section (1) of section 7; 

(i) “National Bank” means the National Bank for Agriculture and Rural Development established 

under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (51 of 1981); 

(j) “notification” means a notification published in the Official Gazette; 

(k) “prescribed” means prescribed by rules made under this Act; 

(l) “Reserve Bank” means the Reserve Bank of India constituted under section 3 of the Reserve 

Bank of India Act, 1934 (2 of 1934); 

(m) “small enterprise” means an enterprise classified as such under sub-clause (ii) of clause (a) or 

sub-clause (ii) of clause (b) of sub-section (1) of section 7; 

(n) “supplier” means a micro or small enterprise, which has filed a memorandum with the 

authority referred to in sub-section (1) of section 8, and includes,— 

(i) the National Small Industries Corporation, being a company, registered under the 

Companies Act, 1956 (1 of 1956); 

(ii) the Small Industries Development Corporation of a State or a Union territory, by 

whatever name called, being a company registered under the Companies Act, 1956 (1 of 1956); 

(iii) any company, co-operative society, trust or a body, by whatever name called, registered 

or constituted under any law for the time being in force and engaged in selling goods produced by 

micro or small enterprises and rendering services which are provided by such enterprises; 

(o) “Small Industries Bank” means the Small Industries Development Bank of India established 

under sub-section (1) of section 3 of the Small Industries Development Bank of India Act, 1989 (39 

of 1989); 

(p) “State Government”, in relation to a Union territory, means the Administrator thereof 

appointed under article 239 of the Constitution. 

CHAPTER II 

NATIONAL BOARDFOR MICRO, SMALLAND MEDIUM ENTERPRISES