Consequences of not filing Form MSME-1

Last Updated On: Nov. 12, 2021, 10 p.m.
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FORM MSME-1: CONSEQUENCES OF NON FILING

The Ministry of Corporate Affairs(MCA) issued a notification on 22nd January 2019 that specific companies having outstanding dues to the MSME (Micro,Small and Medium) enterprises have to file the particulars of all current outstanding dues in Form MSME-1 with the ROC (Registrar of Companies.

 

 

Who are eligible to file MSME-1?

Specified companies should file Form MSME-1 when payments are due to MSME for more than 45 days from the date of acceptance of the services or goods, along with the reason for its delay. Specified companies are companies- 

  • That have obtained goods or services from the MSME. 
  • Whose payments to the MSMEs exceed 45 days from the date of acceptance or deemed acceptance of the goods or services.

 

PURPOSE OF E-FORM:

Purpose of this is to inform ROC about default in payment by Companies to their MSME(Micro and small) vendors.

 

TIME PERIOD TO FILE E-FORM:

Every company on which this form applicable shall file MSME-1 with ROC every half year.

  • April to September, Due Date is 31st October
  • October to March, Due Date is 30th March

*No need to file MSME form in case of NIL transactions or no MSME delayed transactions.

 

FEES FOR MSME-1:

There are no ROC fees for filing of this form. This form shall be file free of cost. Even if any company file this form after due date there is no additional fees prescribed for this form. Even after due date there is no consequences of additional fees.

 

DELAY IN PENALTY OF FORM MSME-1

If a company fails to file Form MSME-1 after the due date, the company is legally liable for penalty under the section 450 of the Companies Act, 2013

A. EXTRACT OF LAW:

Section 450: If a company or any officer of a company or any other person contravenes any of the provisions of this Act or the rules made thereunder, or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, and for which no penalty or punishment is provided elsewhere in this Act, the company and every officer of the company who is in default or such other person shall be liable to a penalty of ten thousand rupees, and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees in case of a company and fifty thousand rupees in case of an officer who is in default or any other person.

 

CONSEQUENCES:

As Section 450 prescribed penalty in case of default of section 405 of Companies Act, 2013.

As e-form MSME-1 doesn’t having any fees. Its file with ROC with NIL fees. Further, CG has not prescribed any additional fees on MSME-1. Therefore, even if company has filed its MSME-1 after due date it is not required to pay any additional fees.

 

What is the penalty imposed on Company and their Directors?

A penalty of ten thousand rupees will be imposed on company and in case of continuing contravention, with a further penalty of one thousand rupees for each day after the first during which the contravention continues, subject to a maximum of two lakh rupees.

Fifty thousand rupees in case of an officer who is in default or any other person will be imposed on DIrector.

 

 

 

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