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MSME FORM 1

In todayu2019s compliance-driven environment, MSME Form 1 ensures timely payments and transparency for Micro and Small Enterprises by mandating half-yearly disclosure of dues pending beyond 45 days. Notified under Section 405 of the Companies Act, 2013, it applies to all companies dealing with Udyam-registered micro and small vendors. The filing helps track payment discipline, boosts MSME liquidity, and strengthens vendor trustu2014impacting ESG ratings, due diligence, IPO readiness, and credit evaluations. Non-filing can attract hefty penalties and damage credibility.

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MSME FORM 1

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  1. MSME FORM 1 MSME Form 1 is a mandatory half-yearly return under the MSME Development Act, 2006, for specified companies to report outstanding payments to Micro and Small Enterprises exceeding 45 days. It ensures transparency in vendor payments and promotes timely settlement, supporting MSME liquidity. Non- compliance can attract penalties under the Companies Act, 2013. OBJECTIVE Increase accountability and encourage prompt settlement of MSME dues – MSME Form 1 compels companies to disclose delayed payments, creating pressure to clear dues on time and fostering a culture of financial discipline. Track payment record of companies through centralized disclosures – The reporting system enables authorities and stakeholders to monitor payment trends and identify habitual defaulters through a single, accessible platform. Provide easier access to finance for MSMEs by making receivables transparent – By openly declaring outstanding amounts, MSMEs can use verified receivables data to secure loans or working capital from banks and financial institutions. IMPACT ON BUSINESS ECOSYSTEM MSME Form 1 as a strategic indicator – Filing reflects a company’s commitment to ethical trade practices and fair business conduct. Enhances vendor confidence and supply chain stability – Timely disclosures build trust with suppliers, ensuring long-term reliability in the supply chain. Acts as a compliance benchmark – Plays a crucial role in ESG ratings, due diligence checks, IPO preparations, and credit or lending assessments. SKMC Global assists businesses in seamless MSME Form 1 compliance by identifying reportable transactions, preparing accurate disclosures, and ensuring timely filings. Their expertise helps avoid penalties while strengthening vendor relations and regulatory credibility. +91 989-125-5499 info@skmcglobal.com www.skmcglobal.com

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