Getting paid on time: the 45-day rule freelancers already have

Freelancers chase money badly because chasing feels like a favour being asked. It reads differently once the deadline stops being something you negotiated and starts being something Parliament wrote down. For a great many independent professionals in India, that is already the position, and the only missing piece is a registration that takes an afternoon.

What section 15 actually says

Read the mechanism carefully, because it has two limbs. Where you and the client have agreed a payment date in writing, payment is due on that date, and that date can never lawfully sit beyond forty-five days from acceptance or deemed acceptance of your work. Where there is no written agreement at all, payment is due by what the Act calls the appointed day, which section 2 puts at fifteen days from acceptance or deemed acceptance.

So the handshake arrangement is stricter than the contract. That surprises most people, and it is worth knowing before you decide that paperwork is what is holding up your invoices.

Section 16 is the part with teeth

• The rate is three times the bank rate notified by the Reserve Bank of India.
• It compounds, with monthly rests. Simple interest is the wrong mental model.
• The clock starts on the appointed day, or on the day immediately after the agreed date.
• Those opening words, "notwithstanding anything contained in any agreement", are what stop a contract term from waiving or capping it.

The client's ninety-day payment clause does not do what they think

Every freelancer working with larger companies has seen a master services agreement carrying a sixty or ninety day payment term. That clause is not void. It is simply incapable of extending the buyer's real deadline past forty-five days from acceptance. A client who pays you on day ninety in good faith, believing they complied with their own contract, has been in statutory default since day forty-six and has been accruing compound interest throughout.

The Supreme Court settled the question of whether a statute of this kind genuinely overrides an agreement, in Silpi Industries v. Kerala State Road Transport Corporation, holding the MSMED Act to be special legislation with overriding effect over other statutes and agreements in force.

Who gets this protection

Section 2(n) defines a supplier as a micro or small enterprise that has filed a memorandum with the authority under section 8(1). Chapter V of the Act, which carries both of the sections above, is headed "Delayed Payments to Micro and Small Enterprises" and works through that definition. Medium enterprises hold Udyam registrations too, and they sit outside this regime.

For a freelancer that boundary is academic. The classification thresholds are set by the Ministry of MSME notification S.O. 1364(E) dated 21 March 2025, effective 1 April 2025, which raised them substantially:

S.O. 1364(E) supersedes the 2020 notification, S.O. 2119(E). Plenty of pages online still quote the older, lower figures without saying they have been replaced.

Udyam, MSME registration and Udyog Aadhaar are the same thing

The three names are stages of one regime rather than three schemes. State-level manual registration came first. From 2015 there was the Udyog Aadhaar Memorandum. Since 1 July 2020 it has been Udyam Registration, which replaced Udyog Aadhaar, added PAN and GSTIN verification, and runs entirely on the portal without paper.

One practical consequence: a Udyog Aadhaar certificate is no longer accepted as proof. If yours dates from that era, it needs replacing with a Udyam registration before it does you any good in a vendor onboarding pack.

What to do with this

• Get the Udyam registration. It is free, it is done against your own PAN and Aadhaar, and it is the thing that puts you inside section 15.
• Put your Udyam number on every invoice, so a buyer's accounts team can see what they are dealing with.
• When a client sends an agreement with a long payment clause, say what the statute does to it before you sign, rather than after they are late.
• When a payment does go past the deadline, the demand notice writes itself, because the interest position comes from the Act rather than from an argument about fairness.

BuildWright handles the registration and drafts the delayed-payment demand notice. Neither one needs you to have a lawyer on retainer, and both work considerably better than a fourth polite follow-up email.