Many MSMEs face payment delays from buyers, which puts financial strain on them. To address this issue, the Ministry of Corporate Affairs has introduced the MSME Form 1. Companies must fill out that form if they owe payment dues beyond 45 days. This form ensures that all delays are reported to the government. It supports small businesses financially and helps in compliance with regulations.
What is MSME Form 1?
MSME Form 1 is a form that a company fills out and submits if it has not received payment for Micro or Small Enterprises (MSEs) for more than 45 days after receiving goods or services. However, it only applies when the supplier is registered under the MSME Act. The form must be filed twice a year – in April and October- and includes details such as the amount due, the supplier’s name, and the reason for any delay in payment. These rules help small businesses receive payments and impose fines on companies.
MSME Form 1 Due Date
Companies can file the form 1 twice a year:
- For the period April to September, the form must be filed by 31st October.
- For the period October to March, the due date is 30th April.
If you fail to file within the due dates can lead to penalties under the Companies Act 2013, including a fine up to ₹25,000 for the company and up to ₹1 lakh for officers in default.
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Who needs to file MSME Form 1?
If a company has taken the goods and services from a Micro or Small Enterprise and has not paid them within 45 days, then the company needs to file this Form. This rule applies to all types of companies registered under the Companies Act, like private limited or public limited companies. If the payment is not received within 45 days, the company must report these unpaid amounts to the government with the help of this Form. This helps small businesses in receiving delayed payments and avoiding financial losses.
How to Download MSME Form 1?
Follow these simple steps for MSME Form 1download:
- Go to the MCA Portal.
- Find e-Forms.
- Select MSME Form 1.
- Download the form.
- Fill in the required information in the form.
- Submit the form to the MCA Portal.
Documents Required
To file Form 1, you should gather the specific details and documents related to their outstanding payments to Micro or Small Enterprises. Here’s what you will need to:
Company Details
- CIN (Corporate Identification Number).
- PAN of the company.
- Email ID and contact details of the company.
Authorized Signatory Details
Name and designation (e.g., Director, CFO, Company Secretary)
Digital Signature Certificate (DSC) of the authorized person.
Supplier Information
- Name of the MSME Supplier
- PAN of Supplier
- MSME Registration status (Udyam/UAM number, if available)
Outstanding Payment Details
- Invoice amount and date.
- Date of acceptance or deemed acceptance of goods/services.
- Date on which the payment became due (45-day rule).
- Reason for delay in payment.
Why MSME Form 1 Matters?
- Supports MSMEs by Encouraging Timely Payments
Form 1 confirms that companies remain accountable for payment delays. It acts as a regulatory reminder, discouraging payment delays and promoting healthy business relationships.
- Legal Protection to Micro and Small Enterprises
By asking companies to report unpaid bills, MSME Form 1 gives small suppliers a way to be seen by the government. It helps protect them from being taken advantage of and supports their right to get paid on time as per the MSME law.
- Encourage Corporate Compliance and Transparency
Form MSME 1 Fosters financial transparency by compelling companies to disclose delays. It goes well with businesses’ legal frameworks and improves trust with stakeholders, regulators, and vendors.
Conclusion
MSMEs are considered the backbone of the economy and contribute to employment. However, many time it face delays in receiving payment. Our Ministry of Corporate Affairs made it mandatory for companies to file the MSME Form 1. You can download this form from the MCA Portal. It will help avoid fines and penalties. You can follow the above step-by-step guide to get help in knowing the document requirements and how to file. If you also want to avoid payment delay and meet the eligibility to be an MSME, go for MSME registration.
FAQs
Ques: What is Form 1 for MSME?
Ans: MSME Form is a half-yearly form that companies file to report unpaid dues over 45 days.
Ques: Is it Mandatory to file Form 1 MSME?
Ans: No, it is not mandatory to file this form.
Ques: What is the penalty for late filing MSME Form 1?
Ans: It can be Rs. 20,000 for the company and up to ₹1 lakh for responsible officers.
Ques: What is the penalty for delayed payment to MSMEs?
Ans: The buyer needs to pay the compound interest at three times the bank rate.
Ques: What is the due date for filing the MSME Form 1?
Ans: The due date for filing the form is 31st October (half yearly) and 30th April.
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