Every businessman has to sell goods on credit in today’s competitive business environment and on time recovery of payment is very important to maintain the smooth running of business. However due to certain reasons payment from the certain parties is not recovered on time which creates a problem for Micro and Small industries which have limited amount of working capital. This affects their business to a great extent and may lead to closure of business due to non-availability of cash on time.
To solve this problem of payment recovery for
Micro and Small E
nterprises
Government of India has a provision for Creation of State wise Facilitation Council under MSME Act. These Facilitation Councils adopt Conciliation and then arbitration for the settlement of dispute between the parties.
As per the MSME Act payment
for the Supply of Goods or Services should be made on or before the agreed date. However this agreed date should not exceed 45 days from the date of acceptance. In case the buyer of goods or services does not make the payment with in the stipulated time then he has to make payment with interest
at three times of the bank rate notified by the Reserve Bank
. Such matters of delayed payment can be submitted to Facilitation Council for Conciliation and then arbitration to the respective state facilitation council.
We provide legal advice and services for the recovery of delayed payments. Our team assists Micro and Small entrepreneurs in recovery of delayed payment through Facilitation council.
Definition of
Micro and Small E
nterprises
As per MSME ACT
(i) a
Micro Enterprise is an enterprise in which
Investment in Plant and Machinery or Equipment does not exceed One Crore Rupees
and
Turnover does not exceed 50 crore rupees
(ii) a
Small
Enterprise
is an enterprise in which
Investment in Plant and Machinery or Equipment does not exceed ten crore rupees
and
turnover does not exceed fifty crore rupees;
