Jayanta Bandyopadhyay 05 May 2025

Treds platform and mca

Whether onboarding on TReDS platform requires a prior approval of lending bank by chargeholder and reporting to MCA

Quick Summary

This discussion clarifies the process of onboarding onto the TReDS platform and its relation to MCA compliance. While direct lending bank approval isn't usually a prerequisite for TReDS onboarding, businesses must adhere to the MSME Act, especially those with turnovers over ₹250 crores, to ensure timely payments to MSME suppliers. The TReDS platform facilitates this compliance through registration, documentation, and verification.

3 Replies

R.K Nanda (Advocate) 05 May 2025

State full facts to get proper reply.your Question contains many abbreviations and thus write their full form.

Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 05 May 2025

To answer your question: *Prior Approval of Lending Bank* -

Generally, prior approval from the lending bank is not explicitly required for onboarding on the TReDS platform.

However, the specific requirements may vary depending on the platform and the lender.

*Reporting to MCA* - The TReDS platform itself doesn't directly require reporting to the Ministry of Corporate Affairs (MCA).

However, corporates with a turnover of ₹250 crores or more are mandated to comply with the MSME Act, which includes paying MSME suppliers within 45 days.

The TReDS platform helps corporates comply with this requirement.

*Onboarding Process* - The onboarding process typically involves: - *Registration*: Registering with a TReDS platform, such as M1xchange. -

*Documentation*: Providing necessary documentation, such as invoices and buyer details. -

*Verification*: Verifying the authenticity of invoices and buyer acceptance. It's recommended to consult with a financial advisor or a legal expert to understand the specific requirements and implications of onboarding on the TReDS platform for your business.