MSME Samadhaan (Micro, Small and Medium Enterprise Development)

MSME Samadhaan

The MSME Samadhaan (Micro, Small and Medium Enterprise Development) Act, 2006 covers provisions of Delayed Payment to Micro & Small Enterprise (Section 15-24). State Governments to establish Micro & Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/filing on Delayed Payments. (Section 20 and 21).

MSME Samadhaan-Delayed Payments to Micro & Small Enterprises under MSMED Act, 2006

MSME Samadhaan

The MSME Samadhaan Act, 2006 (Dealing with Delay Payment)

MSEFC of the state will issue the directions to the buyer unit, after examining the case filed by MSE unit; for the payment of outstanding amount along with interest; as per the terms under the MSMED Act, 2006.

Who can apply?

Any Micro or Small Enterprise having valid Udyog Aadhar (UAM) can apply.

Salient Features

The buyer is liable to repay compound interest with the monthly rests to the supplier on the sum at the three times of the bank rate declared by RBI in case if he fails to make payment to the supplier for his supplies of goods & services within a period of 45 days of the acceptance of the goods/service rendered (section 16).

State governments to notify;

  • Authority for filing Entrepreneur Memorandum
  • Rules of MSEFC
  • Constitution of MSEFC

All states/UTs have notified Authority to file Entrepreneur’s memorandum; 33 States/UTs (i.e., except Assam, Arunachal Pradesh, and Manipur) have notified rules of MSEFC and; all the 36 States/UTs have constituted MSEFCs as per the provisions mentioned under MSMED Act, 2006.

Every reference made to MSEFC shall be decided within a period of 90 days from the date of making such a recommendation; as per the provisions mentioned in the Act.

If the Appellant (not being the supplier) wants to file an appeal; no court shall consider any application for setting aside any decree or award by the MSEFC; unless the appellant (not being the supplier) has deposited with it, the 75% of the award amount (section 19).


Under this Act, MSEFC implements the provisions; chaired by Director of Industries of the State/UTs having official control of the MSE Units. State Government/UTs are requested to assure that the MSE Facilitation council hold meetings regularly, and councils decide the delayed payment cases within 90 days as stipulated in the MSMED Act, 2006.

MSME Samadhaan Portal-Ease of filing application under MSEFC, an Initiative from Office of DC (MSME), M/O MSME

Office of DC has taken the initiative for submitting an online application by the supplier MSE unit fronting the buyer of goods/services before the concerned MSEFC of his/her State/UT. MSEFC Council will view these for their actions. These will also be visible to the Concerned Central Ministries, Departments, CPSEs, State Government, etc. for pro-active actions.

 MSME Samadhaan Registration: Udyog Aadhaar Memorandum

  • The Ministry of MSME has announced a one page Udyog Aadhar Memorandum (UAM) via Gazette of India on 18th September 2015 as part of the initiative to ease the Registration of MSMEs.
  • The UAM supersedes Entrepreneur Memorandum Part EM I and EM II
  • Filing of UAM is voluntary for MSMEs. However, it is mandatory for Medium Enterprises
  • The units with permanent SSI registration certificates preceding to the implementation of the MSMED Act, 2006 or EM-II Memorandum or Udyog Aadhaar Memorandum would also be suitable for availing of assistance under various schemes which the government implements.
  • Unit with EMII registration need not file UAM but if they so desire they may also submit the Udyog Aadhaar Memorandum.
  • The memorandum shall be filed only after setting up the unit, obtaining all regulatory approvals and starting commercial operations.
  • UAM registration has substituted Entrepreneurship Memorandum-If (EM-II) and Small Scale Industry Registration for all purposes. Central or State Government regulatory bodies, tax authorities, utilities providing water, power, etc. banks and other financial institutions and similar organizations should accept UAM in place of EM–II for all purposes. Earlier, there was a provision to take Enterprise Memorandum-I (EM-I) registration before establishing an enterprise. Applicants used to file applications to obtain utilities, building plan approval from local bodies, consent for establishing from State Pollution Control Board or applying for term loan from the bank or a financial institution for setting up the enterprise along with a copy of EM-I.
  • UAM registration is granted; after an enterprise commences commercial operations. Now there is no need for registration before establishing an enterprise. The practice of EM-I registration is closed. There is no counterpart document to EM-I.
  • Therefore, local bodies, regulatory bodies, utilities, tax authorities, banks and financial institutions and other similar bodies should not ask for EM-I from the candidates who want to set up an enterprise.
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