What is Penalty for late filing of MSME Form 1?
Nexa Consultancy | Startup & Finance Glossary
If a company required to file MSME Form 1 (for overdue payments to MSMEs) fails to do so, it can face a penalty of up to ₹25,000. Additionally, every officer in default can be imprisoned for up to 6 months or fined between ₹25,000 and ₹3 Lakhs.
Startup Example: A startup has overdue payments to an MSME vendor but fails to report it in MSME Form 1. This exposes the founders/directors to severe personal liability and penalties.
Our bookkeeping services help track vendor payments accurately.