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CS Executive · Setting Up of Business, Industrial and Labour Laws · Micro, Small and Medium Enterprises

Meera's medium enterprise in Surat provides services and is a partnership firm. She asks what Section 25 of the MSMED Act, 2006 is intended to achieve for such an enterprise. Which is correct?

Section 25 is intended to facilitate closure of her business through a Scheme notified by the Central Government. A partnership firm is not a registered company, so it falls within the provision. Memorandum filing and Facilitation Council references are governed by other sections.

  1. AIt is intended to facilitate closure of her business through a notified SchemeCorrect
  2. BIt compels her to file a memorandum before closing
  3. CIt refers her disputes to the Facilitation Council for arbitration
  4. DIt converts her enterprise into a company

Explanation

Section 25 aims at facilitating closure of business by a micro, small or medium enterprise that is not a registered company, so a partnership firm qualifies. Memorandum filing is under Section 8 and dispute reference under Section 18, which are different matters.

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