Prevent late payments from starting

Doing business in India can be rewarding, but late payments can disrupt cash flow. Prevent them by setting crystal-clear payment terms upfront, including due dates, late fees, and interest charges in contracts or invoices, to avoid misunderstandings and ensure everyone is on the same page.

Developing a system for sending clear and professional follow-up emails after due dates is crucial for impactful reminders. These reminders serve two important purposes. Firstly, they serve as a gentle nudge to prompt customers to settle their outstanding balance. By reminding them in a professional manner, it increases the likelihood of receiving payment and reduces the chances of potential disputes. Secondly, these reminders also serve as legal documentation, which can strengthen your case if legal action becomes necessary. Having a documented record of these reminders showcases your effort to communicate and resolve matters amicably, which can be beneficial in legal proceedings. Therefore, implementing an effective system for sending follow-up emails not only benefits your financial stability but also provides a solid foundation for potential legal actions, ensuring your business's best interests are protected.

Micro and Small Enterprises

Samadhan Portal: This is to apprise you of the government's esteemed initiative, the Samadhan Portal. This meticulously crafted platform has been exclusively developed to cater to the needs of micro and small enterprises, providing expeditious and efficacious means for recovering delayed payments. By availing of the comprehensive services offered through this portal, businesses can navigate the legal landscape with confidence and swiftly resolve any pending financial obligations. Embrace this invaluable resource and empower your enterprise to reclaim what rightfully belongs to you in a lawful and expedited manner.  To file the online application on the Samdhan Portal for recovery of delayed payment,  the Unit first should be registered as MSME under UDYAM portal.

Recovery Suit: A Recovery Suit, also known as a Money Recovery Suit, is a legal action taken in civil court to recover a debt that is past due. It is a common way for businesses and individuals to collect outstanding payments from debtors. The time for filing a suit for money recovery is 3 years from the date when the cause of action arises. However, it can also be condoned and subjected to the discretion of the court.

NCLT: A demand notice under the Insolvency and Bankruptcy Code (IBC) can be an effective tool for recovering delayed payments from a corporate debtor in India. You can initiate a demand notice process if you are an operational creditor owed money by a corporate debtor (a company registered under the Companies Act). An operational creditor is someone who supplies goods or services to a company for its day-to-day operations. This could include suppliers, vendors, employees, etc. The debt must be a financial debt and must be in default for at least 90 days.

Corporate Debtor

Legal Measures: