Background:
On July 15th, 2024, the Ministry of Corporate Affairs issued a significant amendment to the Specified Companies Order under the Companies Act 2013 vide Specified Companies (Furnishing of information about payment to micro and small enterprise suppliers) Amendment Order, 2024. This amendment aims to strengthen the reporting framework concerning payments to micro and small enterprise (MSE) suppliers.
Amendment:
The amendment introduces a pivotal change impacting specified companies. According to the revised order, companies must now report details regarding payments pending to MSEs. Specifically, companies are required to furnish information if payments to MSEs remain outstanding for more than 45 days from the date of acceptance or deemed acceptance of goods or services.
Key provisions of the amendment include:
New Requirements in the format:
| SW-Remarks: The rationale behind this amendment is to enhance transparency and accountability in dealings between companies and MSEs. It aligns with the broader objectives of promoting timely payments to MSEs, which are crucial for their sustainability and growth. By enforcing stricter reporting norms, the government aims to safeguard the interests of MSEs and ensure fair business practices across sectors. |
Ansh Agarwal, Audit Associate, SW
