The Delhi High Court has made a decision that is particularly important for small and medium-sized businesses to understand. In essence, the court said that if a business registers itself under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) after a contract has started, it cannot use the MSME Council to resolve disputes that happened before its registration. This means if there were any issues or claims that arose before the business officially became registered under the MSME Act, those specific disputes cannot be taken to MSME arbitration for resolution.
From a business coach’s perspective, this ruling emphasizes the importance of timely registration under the MSME Act. If you’re running a small or medium-sized business, registering as an MSME from the get-go can provide you with several benefits, including the ability to arbitrate disputes through the MSME Council. This decision serves as a reminder to ensure your business is registered before entering into contracts or as soon as possible, to take full advantage of the protections and benefits offered by the MSME Act. It’s about being proactive and strategic in protecting your business interests and ensuring you have access to all the legal tools available to you from the start of your business activities.
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About Rajiv Talreja
Rajiv Talreja is the Founder of Quantum Leap Learning Solutions Pvt Ltd, Asia’s Largest MSME Business Coaching Company. He started his entrepreneurial journey at 20, founding Quantum Leap. Despite early setbacks, he re-educated himself by interviewing 300+ entrepreneurs, leading to his bestselling book “Lead or Bleed.” He organized the popular Business Breakthrough Seminar and created The Business P.A.C.E. Program, benefiting over 20,000+ entrepreneurs.
