A question every MSME founder eventually faces
Our co-founding partner Junaid Aamir breaks it down in four slides below, how provisions of MSMED Act apply to parties, and what to keep on file even when nothing
was signed.
"There's no signed contract, so there's nothing you can claim."
We hear a version of this line often enough from MSME founders, usually when a payment is already months late, that it deserves a proper answer, not just a rebuttal in a legal notice.
Most MSME suppliers we speak to assume that a written agreement is the foundation of their right to be paid on time, and that its absence weakens their position. Under the MSMED Act, 2006, the opposite is true. Without a written agreement, the buyer's payment window under Section 15 shrinks from 45 days to 15.
If you run a small enterprise and have ever been told "there's no contract, so there's no claim," this is worth four slides of your time.
We write on MSME, commercial disputes and answer other real world queries as they play out in practice.
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