Mandatory TReDS Registration Update for Companies and CPSEs

The Ministry of Micro, Small and Medium Enterprises (“M/o MSME”) vide notification 4845(E) has amended notification numbers S.O. 5621(E), dated the 2nd of November 2018 and S.O. 5622(E), dated the 2nd of November 2018, concerning TReDS registration update.

Background of TReDS Mandatory Onboarding 2024

Prior to the notification, M/o MSME vide notification SO 5621(E) dated 02.11.2018 had mandated that all companies registered with the Companies Act, 2013 with a turnover of more than 500 crore (rupees five hundred crore) and all Central Public Sector Enterprises (“CPSEs”) shall be required toTReDS mandatory onboarding 2024 on the Trade Receivables Discounting System platform (“TReDS”), set up as per the notification of the Reserve Bank of India (“RBI”).

The Registrar of Companies in each State was authorised to monitor the above compliance by companies under its jurisdiction and the Department of Public Enterprises, Government of India was authorised to monitor the compliance of such instructions by CPSEs.

Latest Notification on TReDS Registration Update

Now, as per the latest TReDS registration update notification published by M/o MSME, all companies registered under the Companies Act, 2013 with a turnover of more than INR 250 crore (Rupees Two Hundred and Fifty Crore) and all CPSEs shall be required to get themselves onboarded on the TReDS platform set up as per the notification of the RBI.

Benefits of TReDS Onboarding for MSME Suppliers

The registration of such companies and institutions on TReDS Platforms benefits the MSMEs suppliers in various way such as:

• Securing financial assistance digitally at competitive terms and without any collateral security, based on the invoices / bills for supplies to large corporates.
• Reduced dependency on traditional methods of financing.
• Improves the liquidity for MSMEs resulting in improved cashflow management.
• Reduced waiting times for payment realization.

Source:

Ministry of Micro, Small and Medium Enterprises, Notification No. 4845(E) dated 7th November 2024.
Official Notification PDF: Official TReDS Registration Update Notification