LEGAL FRAMEWORK

AND SMES
Contemporary Policy & Institutional Framework
SMES
SMALL AND MEDIUM ENTERPRISES
SMEs are businesses that fall within specific size limits, typically based
on the number of employees or annual revenue. They play a critical
role in the economy by driving innovation, providing employment,
and contributing to economic growth.
IMPORTANCE OF
LEGAL FRAMEWORKS FOR SMES:
A comprehensive legal framework ensures that SMEs operate within
the law, providing them with structure, stability, and protection while
also enabling them to compete fairly and grow sustainably.
 1.INDUSTRIAL LAWS
Objectives: To promote and regulate industrial activities in order
to ensure safe, efficient, and sustainable practices.
Definition: Defines what constitutes a small or medium enterprise
in the industrial sector based on criteria such as revenue, number
of employees, or production capacity.
Salient provisions:
Licensing requirements: SMEs must obtain the appropriate
licenses and permits to operate legally in the industrial sector.
Safety regulations: Compliance with health and safety
standards, such as equipment maintenance and employee
PROVISIONS OF training.
Environmental considerations: Adherence to environmental
VARIOUS LAWS laws and standards to minimize pollution and resource waste.
Example: A small manufacturing firm must secure permits for
APPLICABLE TO air and water emissions and ensure proper disposal of
industrial waste.
SMES
 2. COMMERCIAL LAWS
Objectives: To regulate commercial transactions and business
practices to promote fair trade and protect consumer rights.
Definition: Establishes criteria to classify businesses as SMEs in
commercial sectors, typically considering revenue and employee
count.
Salient provisions:
Consumer protection laws: Protects customers from fraud,
unsafe products, and unfair practices.
Intellectual property rights: Safeguards SMEs' creative and
innovative work, such as patents, trademarks, and copyrights.
PROVISIONS OF Contract law: Ensures legally binding agreements are clear
and enforceable.
VARIOUS LAWS Real-life example: An online SME retailer must adhere to laws
regarding data protection and online transactions.
APPLICABLE TO
SMES
 3. LABOR LAWS

Objectives: To protect the rights of workers and ensure fair and

safe working conditions.
Definition: Establishes the scope and size of SMEs for labor
regulation purposes, such as the number of employees.
Salient provisions:
Minimum wage requirements: SMEs must pay their employees
at least the legal minimum wage.
Working hours: Compliance with laws regarding maximum
working hours and overtime pay.
Employee benefits: Includes provisions such as paid leave,
PROVISIONS OF health insurance, and retirement plans.
Real-life example: A small IT consultancy firm must comply
VARIOUS LAWS with labor laws regarding working hours and provide paid
leave to employees.
APPLICABLE TO
SMES
 NEED FOR A COMPREHENSIVE LEGAL
FRAMEWORK FOR SME SECTOR

Regulatory Protection for Access to Global

clarity SMEs
Importance of clear,
consistent, and
understandable legal
requirements: SMEs
benefit from
straightforward
regulations that help them
comply with the law and
avoid legal complications.
Example: A business-
friendly registration
process helps SMEs
establish their operations
quickly and efficiently.
resources competitiveness:
Safeguarding against Ensuring SMEs have Providing a legal
unfair practices by access to funding, framework that allows
larger competitors: training, and support SMEs to compete
Legal frameworks programs: internationally: Legal
protect SMEs from Comprehensive legal frameworks should
monopolistic practices frameworks provide include support for SMEs
and anti-competitive SMEs with opportunities to participate in
behavior. to grow and sustain international trade and
Example: Anti- their business. access new markets.
monopoly laws prevent Example: Government Example: Trade
larger businesses from grants, loans, or agreements and export
engaging in unfair mentorship programs assistance programs
practices that would help SMEs invest in new enable SMEs to expand
harm SMEs. projects or expand their their business globally.
operations.
THANK YOU
FOR YOUR NICE ATTENTION

NAME ROLL NO. COURSE 3rd Year 6th Sem

Aayushi Kumar 21501355 BA program ESB GEO