India Tax & Regulatory
MSME Udyam Registration Impact
A target's Udyam (MSME) registration status affects buyer diligence around delayed-payment protections owed to the target's own vendors and eligibility for priority-sector lending used to fund the deal.
Buyer Example
Buyer financing a ₹12 Cr acquisition of a Ludhiana bicycle parts manufacturer partly through bank debt discovers the target's Udyam-registered MSME vendors are owed overdue payments beyond the 45-day statutory limit under the MSME Development Act — buyer requires these dues cleared as a condition precedent, since unpaid MSME dues carry compounding interest liability that would transfer with the business.