Msme1 and mca compliance

It is mandatory to take the registration number from the suppliers or a certificate that they have not registered if not registered

Is it a compliance under MCA OR MSME ACT?

MSME-1 Submission for Unlisted Public Limited Companies Mandatory Filing Requirements Filing Form MSME-1 is mandatory for companies that default or make delayed payments to micro and small enterprise suppliers.

According to the Companies Act, 2013, and MSME Development Act, 2006, companies must disclose outstanding payments to MSME suppliers in their Board's report and file Form MSME-1 on a half-yearly basis.

Compliance Challenges If your accounting software doesn't capture MSME registration numbers, you may face challenges in: -

Identifying MSME suppliers - Tracking payments and outstanding dues -

Filing Form MSME-1 accurately Potential Consequences of Non-Compliance Non-compliance with MSME-1 filing requirements can result in penalties and fines, including: -

Up to ₹25,000 for the company - Imprisonment up to 6 months or fine between ₹25,000 and ₹300,000 for directors, CFO, and CS Steps to Ensure Compliance To ensure compliance, consider the following steps: -

 *Identify MSME Suppliers*: Request MSME registration certificates from suppliers and maintain records. -

*Track Payments*: Implement a system to track payments to MSME suppliers and identify outstanding dues beyond 45 days. -

*File Form MSME-1*: Submit Form MSME-1 on a half-yearly basis, providing details of outstanding payments to MSME suppliers.

Recommendations Given the complexities, it's advisable to: -

Consult with a chartered accountant or company secretary to ensure compliance. - Review your accounting software capabilities and consider upgrades to track MSME registration numbers and payments. -

 Maintain accurate records of MSME suppliers, payments, and outstanding dues.

Please note that the company which receives products or services from MSME needs to comply to the MSME related rules but it cannot force the MSMEs to register as MSME in the Udyam portal. If the supplier registers then one has to provide the details as needed along with the registration number. However, if the MSME supplier has not registered, one can take a certificate for the same. or else stop purchasing from unregistered suppliers (which may be unfair to the MSMEs since registration is not compulsory)