Form MSME-1

Legal Basis: Section 405 and the 2019 MSME Order

Two different statutes work together here: the MSMED Act, 2006 sets the payment deadline for MSE suppliers, and the Companies Act, 2013 (through Section 405 and the 2019 Order) forces companies to disclose when they miss that deadline.

Who Must File Form MSME 1 (Applicability)

A company is a "specified company" and must file Form MSME 1 if both conditions below are true:

• It is a private limited or public limited company registered under the Companies Act, 2013 (any size, any turnover).
• It has received goods or services from a supplier registered as a Micro or Small Enterprise under the MSMED Act, 2006, and a payment to that supplier remains outstanding for more than 45 days from the date of acceptance (or deemed acceptance) of the goods or services.

Following the July 2024 update to the MCA V3 form, filing companies are also expected to disclose payments made within the 45-day window and payments made after it during the half-year, not only the amount still outstanding at period end. In practice, this means a company should review its full MSE ledger for the half-year, not just the closing balance, before deciding it has nothing to file.

Who Is Exempt

• Companies with no transactions with Micro or Small Enterprise suppliers during the half-year.
• Companies where every payment to an MSE supplier was cleared within 45 days.
• Any company dealing only with Medium Enterprises, traders, or unregistered vendors (a vendor without Udyam registration is not legally an MSE for this purpose, even if it is a small business).
• There is no requirement to file a "Nil" return. If a company has nothing to report, it simply does not file for that period. Do not file a blank or nil MSME Form 1; the e-form does not accept a nil filing in the first place.

Information Required in the Form

Documents Required

Unlike MSME (Udyam) registration, this filing does not need Aadhaar or address proof of an individual. It needs company and transaction records instead:

• Company Identification Number (CIN) and PAN of the company
• Digital Signature Certificate (DSC) of the authorized signatory
• List of vendors and their Udyam Registration Numbers (request this directly from each supplier if you do not already have it on file)
• Purchase ledger or accounts payable ageing report for the half-year
• Invoice dates and corresponding payment dates for each MSE supplier
• Board resolution authorizing the signatory, if your company's internal policy requires one for MCA filings
• GSTIN of MSE suppliers, where available, to help cross-verify identity

Step-by-Step Filing Process

• Identify MSE suppliers. Go through your vendor master and accounts payable records and flag every supplier registered as Micro or Small under Udyam. Request a Udyam certificate copy from vendors you are unsure about.
• Review the payment ageing. For the half-year in question, check which of those suppliers had any invoice unpaid for more than 45 days from acceptance, even briefly.
• Compile the data set. For each flagged supplier, note the amount paid on time, the amount paid late, and the amount still outstanding, split by the 45-day threshold, along with a reason for any delay.
• Log in to the MCA V3 portal using business user credentials at mca.gov.in.
• Navigate to MCA Services > Company e-Filing > Compliance Services > MSME - Half Yearly Return of Micro or Small Enterprise.
• Fill in company details. CIN and PAN auto-populate; verify the registered office and email.
• Enter supplier-wise payment data exactly as compiled in step 3.
• Attach the DSC of the authorized signatory and complete the declaration.
• Submit the form and download the Service Request Number (SRN) acknowledgment as proof of filing.
• Track the filing status under "View Public Documents" on the MCA portal if you need to confirm it later.

Due Dates for FY 2025-26 and FY 2026-27

As of today, the return for the April 2026 to September 2026 period is the one currently running, with a filing deadline of October 31, 2026. Since the form now requires disclosure of the full half-year transaction pattern (not just the closing outstanding balance), it is worth starting the vendor and ledger review well before the deadline rather than in the last week of October.

Filing Fees and Late Fees

This is where most companies get the compliance wrong, because they assume a missed deadline means a late fee, the way it does for annual ROC filings like AOC-4 or MGT-7.

Form MSME 1 has no prescribed government filing fee, and the Central Government has not prescribed any additional or late fee for delayed filing either. You will not be charged a per-day late fee on the MCA portal the way you would for a delayed annual return.

That does not mean a missed deadline is harmless. Because no specific additional fee is set, non-compliance is dealt with through a direct monetary penalty under Section 405(4) of the Companies Act, 2013, rather than a late-filing fee. The next section covers exactly what that penalty looks like.

Penalties for Non-Filing (Section 405(4))

A few points worth knowing before you assume this is a minor risk:

• The penalty applies separately to the company and to every officer in default, so a small company with two or three directors can see the total exposure multiply quickly.
• The Registrar of Companies has issued real adjudication orders under this section. In at least one publicly recorded case, a company and its directors were penalized over Rs. 2.85 lakh each for filing MSME Form 1 late.
• Since there is no cap on how many half-years can be adjudicated retroactively, a company that has skipped this filing for several periods can face penalties for each missed period separately, not just the most recent one.
• Beyond the direct penalty, a poor MSME payment-compliance record can affect how lenders, larger customers, and investors view a company during due diligence, since MSME payment discipline is increasingly checked as part of vendor and credit risk assessments.

What Changed: MCA V3 Portal Update

The MCA moved company e-filing, including MSME Form 1, to its V3 portal effective July 15, 2024. This update changed more than just the login screen:

• Broader reporting scope. Under the earlier V2 form, a company generally needed to report only what was still outstanding at the half-year's end. Under V3, the form expects details of all qualifying transactions during the half-year, including amounts that were eventually paid on time and amounts paid late, not only the closing balance.
• Practical effect. A company that paid an MSE vendor 60 days after acceptance, but cleared the full amount before the half-year closed, had nothing to report under the old form. Under the current form, that transaction still needs to be disclosed, because the delay itself occurred during the reporting period.
• More granular fields. The current version separates payments into four buckets: paid within 45 days, paid after 45 days, outstanding under 45 days at period end, and outstanding over 45 days at period end.

If your compliance team has been filing this form the same way since 2019, it is worth a fresh review, since the older "only report what's still unpaid" approach can now result in an incomplete filing.

Common Mistakes Companies Make

• Assuming all small vendors qualify. A supplier only counts as an MSE if it holds a valid Udyam Registration Number. A small business without Udyam registration is not legally an MSE for this filing, even if it looks like one.
• Filing a Nil return. The e-form does not support a Nil filing, and one is not required. Some companies waste time trying to file a blank form when the correct action is simply not to file at all for that period.
• Reporting only the closing outstanding balance. As covered above, the current V3 form expects the full half-year transaction pattern, not just what is unpaid on the last day.
• Treating "no late fee" as "no consequence." The absence of an additional fee leads some finance teams to deprioritize this filing, right up until a Section 450 adjudication notice arrives.
• Missing suppliers buried in expense categories. Freight, packaging, printing, and maintenance vendors are commonly MSEs but get overlooked because they are not treated as "main" suppliers in the accounting system.
• Waiting until the deadline week to start the review. Reconciling a full half-year's accounts payable ageing across every vendor takes longer than most finance teams expect, particularly the first time.

Pro Tips From Practice

• Build a standing list of Udyam-registered vendors and refresh it every half-year, since a vendor's MSME classification can change (the investment and turnover limits were revised effective April 1, 2025).
• Set an internal accounts payable alert at the 40-day mark for any MSE vendor invoice, giving your team a five-day buffer to clear payment before it crosses the 45-day threshold and becomes reportable.
• Keep a documented, specific reason for every payment delay as it happens, rather than reconstructing explanations at filing time.
• Assign one person as the standing DSC holder and backup signatory for MCA filings, so a signatory's unavailability never becomes the reason for a missed deadline.
• If your company has skipped this filing in a prior half-year, get professional advice before deciding whether and how to regularize it, since voluntary disclosure is generally treated more favorably than being caught on ROC scrutiny.

Benefits of Timely Filing

• Avoids a penalty that starts at Rs. 20,000 per entity and can reach Rs. 3,00,000.
• Improves internal cash flow visibility, since preparing this return forces a genuine half-yearly review of accounts payable ageing.
• Strengthens vendor relationships and credibility with MSE suppliers, banks, and investors who track a company's payment discipline.
• Keeps your MCA compliance record clean, which matters during fundraising, loan approvals, and statutory audits.
• Supports India's broader MSME payment-discipline framework, helping small suppliers get paid on time and manage their own working capital.

Our Form MSME 1 Filing Process

• Supplier Identification. We review your vendor master and purchase ledger to identify every MSE-registered supplier, and help you collect Udyam certificates for vendors you have not yet verified.
• Accounts Payable Review. Our team goes through the half-year's invoice and payment dates to flag every instance where a payment crossed the 45-day mark, even briefly.
• Data Compilation. We prepare the supplier-wise breakup exactly as the current MCA V3 form requires: paid within 45 days, paid after 45 days, and outstanding at period end split by the 45-day threshold.
• MCA V3 Filing. We complete the e-form on the MCA V3 portal, attach your authorized signatory's DSC, and submit it well within the deadline.
• Acknowledgment and Record-Keeping. We share the SRN acknowledgment and maintain a filing record for your statutory audit file.
• Ongoing Monitoring. For retainer clients, we track the next half-year's deadline and flag it in advance, so this filing never becomes a last-minute scramble.

Timeline

Total turnaround for most small and mid-sized companies runs about one to two weeks from document collection to filing, though this depends heavily on how quickly your accounts team can pull ageing reports and vendor confirmations.

Why Choose LegalDev for Form MSME 1 Filing?

• We file this correctly, not just quickly. Given how often this compliance gets confused with MSME registration, our team verifies applicability first, rather than filing by default.
• We work off your real accounts payable data, not assumptions, since an incomplete supplier list is the most common reason for an incorrect filing.
• Transparent scope, no surprise charges. Since there is no government fee for this form, our quote covers only the professional service, laid out clearly before you engage us.
• Ongoing deadline tracking. We flag your next half-yearly due date in advance so this filing never slips.
• Experienced compliance team handling MCA filings, annual returns, and related corporate compliances for companies across India.

Ready to file your Form MSME 1 before the deadline? GET A FREE QUOTE or call our compliance team to review your MSME payment exposure today.

Frequently Asked Questions

Conclusion

Form MSME 1 is a small filing with a large blind spot: no government fee, no automatic late fee, and yet a real penalty of up to Rs. 3,00,000 waiting for companies that skip it entirely. The safest approach is treating it as a genuine half-yearly finance and compliance task, not an afterthought, since the current MCA V3 form now expects a full accounting of your MSE transactions, not just a snapshot of what is unpaid on the closing date. If your company buys from any MSE-registered vendor, build the 45-day payment check into your regular accounts payable review, and file before October 31 and April 30 each year.

Need help getting your Form MSME 1 filed correctly and on time? Talk to our compliance team today for a clear scope and quote, no government fee, no guesswork, just a properly filed return.