Failure to file MSME Form-I can lead to severe penalties, as demonstrated by the recent case of Blissful Garments Private Limited. Understanding the requirements and consequences of non-compliance is crucial for all companies.
Under Section 405 of the Companies Act, 2013, the Central Government mandates companies to furnish information on outstanding dues to micro or small enterprise suppliers via MSME Form-I. Non-compliance attracts penalties, including fines and legal action.
Lack of Explanation: The company failed to provide a satisfactory explanation for the non-filing, resulting in penalties imposed by the Registrar of Companies (ROC).
Financial Impact: Blissful Garments and its Managing Director faced penalties totaling Rs. 16,09,000.
Legal Ramifications: The ROC ordered that the Managing Director’s penalty be paid from personal sources/income.
Compliance is Key: Non-filing of MSME Form-I can incur significant penalties, even for small companies.
Timely Action: Companies must file MSME Form-I by the specified deadlines to avoid penalties and legal repercussions.
Personal Liability: Directors may be held personally liable for non-compliance, highlighting the importance of adherence to statutory requirements.
The case of Blissful Garments Private Limited underscores the importance of compliance with MSME Form-I regulations. Companies must prioritize timely filing to avoid financial losses and legal complexities. Adhering to regulatory requirements not only mitigates risks but also fosters trust and transparency in corporate governance.
