Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 gets notified

In continuation to what we reported earlier (please refer to the email in trail), the Ministry of Law and Justice has notified the Micro, Small and Medium Enterprises Development (Amendment) Act, 2026 (“Amendment”). The Amendment has gained effect on 13th August 2026.

The Micro, Small and Medium Enterprises Development (Amendment) Bill, 2026 (“Amendment”) has been passed by the Parliament on 7th August 2026 to further amend the Micro, Small and Medium Enterprises Development Act, 2006 (“Principal Act”). The Amendment incentivises the growth of the micro, small and medium enterprises, promotes Ease of Doing Business and modifies the existing penalties prescribed under the Principal Act.

Key Highlights:

1. Whoever wilfully furnishes false information in the memorandum of registration of micro, small and medium enterprises will now be liable to the following:

• Warning at the first instance of non-compliance;
• Penalty which will not be less than Rs. 1000 but may extend to Rs. 50,000 in case of second or subsequent instances of non-compliance.

• If a buyer contravenes the requirement to specify unpaid amount with interest in the annual statement of accounts, he will now be liable to the following:

• Warning at the first instance of non-compliance;
• Penalty which will not be less than Rs. 10,000 but which may extend to Rs. 50,000 in case of second contravention;
• Fine of Rs. 50,000 which may extend to Rs. 1 Lakh in case of third or subsequent contravention.

• The aforesaid mentioned penalties will be increased by 10% of minimum amount of penalty, after the expiry of every three years from the date of commencement of the Amendment, as may be notified by the Central Government.

Source: PIB