Indian businesses need to file MSME-1 as a compliance form under the provisions of the Micro, Small, and Medium Enterprises Development (MSMED) Act 2006. MSME-1 stands as an essential document which enables companies to state their payment delays with businesses classified as MSMEs under MSME Act registration.

Every company that registers under company law or limited liability partnership must file Delayed Payments to Micro and Small Enterprises reports following conditions described in the MSMED Act through MSME-1 forms.

• The MSME-1 form allows businesses to display payment practices towards Micro Small and Medium Enterprises through data about late payments that exceed 45 days beyond supply dates or service completion periods.

• This form plays an integral part in a program to boost speedy payments between businesses who maintain reliable partnerships. Operating cash benefits for MSMEs come from finishing the payment requirement that depends on rapid payment receipt.

• The financial liquidity of MSMEs depends on swift payment receipt for their expansion into the economy. This document operates as a preventive measure designed to provide timely payment distributions between participants in the system.

• All businesses alongside limited liability partnerships need to submit MSME-1 because Companies Act 2013 specifies legal requirements for MSME-1 submission.

Who must file MSME-1?

• A company whether it is public or private and has outstanding payments to Micro and Small enterprises for more than 45 days from the date of acceptance or deemed acceptance of goods & services must file form MSME-1.

When should MSME-1 be filed?

• A Registrant submits MSME-1 data file statements to the Registrar of Companies twice per year during their two half-year periods for regular MSME payment obligation updates.

Details required to file MSME-1 

• Corporate identification Number (CIN) & PAN of the company

• Name of the company

• Registered office address

• Email Id 

• Name and designation of the person signing the form 

• Reason of delay in payment and amount due

All deadlines for paying outstanding amounts need to be presented in MSME-1 format in full detail. The reporting system imposes regulations on the submission of specified information according to MSME-1 standards.

• Particulars of the Supplier: Every supplier with delayed payments must receive a listing on the reporting form. The company needs to present supplier information as well as Udyog Aadhar Number (optional) for MSME providers.

• Amount Outstanding: Every MSME provider must have their complete outstanding amount displayed within this document. Payment debts must be categorized by their age period (beginning from greater than 45 days and going to greater than 60 days and beyond).

• Date of Payment Due: The written document needs to include both the expected payment appearance timeline as well as all actual payment dates.

• Period of Delay: The contractual time period must be indicated through a specified number of days that payment will be delayed.

• Reason for Delay: Every business needs to detail the payment delay causes when presenting their financial troubles or business problems.

MSME-1 filings serve as a sign to honor the 45-day payment term according to the MSMED Act. Failure to follow this requirement exposes businesses to official penalties along with potential legal penalties.

The specified companies must file MSME-1 half-yearly return through MCA. Filing date for Form MSME-1 is listed below according to the timelines established for submission.

Every business that neglects to submit the MSME-1 can lead to significant penalty under Companies Act 2013. Under section 405(4), if a company fails to file MSME-1, the company and every officer by default will be liable to a penalty of ₹20,000, and additional ₹1000 of each day if failure continues which exceed maximum till ₹3,00,000

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