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TReDS Registration: A Complete Guide

TReDS Registration: A Complete Guide

The Trade Receivables Discounting System (TReDS) is an innovative online platform designed to facilitate Micro, Small, and Medium Enterprises (MSMEs) in converting their trade receivables into cash. This system is crucial for improving liquidity and financial stability for small businesses in India. Below is a comprehensive guide on the registration process for TReDS.

What is TReDS?

TReDS is a digital platform established under the guidelines of the Reserve Bank of India (RBI) to aid MSMEs in financing their trade receivables from corporate buyers, government departments, and public sector undertakings. It allows MSMEs to discount invoices and bills of exchange, providing them access to working capital quickly and efficiently.

Who Needs to Register?
  • Mandatory Registration: All companies registered under the Companies Act with a turnover exceeding ₹250 crore and all Central Public Sector Enterprises must register on a TReDS platform as per the notification issued by the Government of India.
  • Voluntary Registration: Other MSMEs can also register to benefit from the financing options available through TReDS.
Participants in TReDS

The key participants involved in TReDS include:

  • MSME Sellers: Small businesses that sell goods or services.
  • Corporate Buyers: Large companies that purchase goods/services from MSMEs.
  • Financiers: Banks, Non-Banking Financial Companies (NBFCs), and other financial institutions that provide funding against receivables.
Registration Process

The registration process for TReDS involves several steps:

  1. Online Registration:

Visit one of the TReDS portals:

  • Receivables Exchange of India Ltd. (RXIL)
  • TREDS Ltd. (Invoicemart)
  • Mynd Solutions (M1 Exchange)
2. Mynd Solutions (M1 Exchange)

The following documents are typically required for registration:

  • Application Form
  • Master Agreement
  • Bank Confirmation Letter
  • Mandate form for debiting the designated bank account (for financiers and buyers)
  • KYC documents of the applicant entity, promoters, administrators, and authorized signatories
  • Proof of business registration (e.g., Certificate of Incorporation)
  • GST registration number
  • Financial statements (e.g., ITR, annual reports)
  • Bank details including a cancelled cheque leaf
  1. KYC Compliance:

Complete KYC verification for both the entity and individual signatories, which includes identity proof, address proof, and signature verification from a banker.

  1. Approval Process:

Once all documents are submitted, they will be reviewed by the respective TReDS platform. Upon successful verification, registration will be approved.

Benefits of Registering on TReDS
  • Access to Working Capital: MSMEs can convert receivables into cash quickly.
  • Competitive Rates: The auction mechanism allows for competitive discounting rates.
  • Paperless Transactions: The entire process is digital, reducing paperwork.
  • Improved Cash Flow: Helps maintain liquidity and financial health.
Conclusion

The Trade Receivables Discounting System (TReDS) serves as a vital tool for MSMEs in India to access quick financing against their trade receivables. By understanding the registration process and requirements, businesses can leverage this platform to enhance their cash flow and operational efficiency. For further information or assistance with registration, businesses can visit the official websites of the respective TReDS platforms.

For more information related to TReDS Registration reach out to our Corporate Genie Experts on +91-8700202997 or visit our website www.corporategenie.in

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