Micro, Small and Medium Enterprises (MSMEs) are widely regarded as an important segment of the Indian economy because of their contribution to employment generation, industrial production, exports, and regional development. Efficient Working Capital Management (WCM) is particularly significant for MSMEs, as they largely depend on short-term funds for managing cash, inventory, receivables, payables, and day-to-day operational requirements. In recent years, legal reforms and the increasing use of Artificial Intelligence (AI) and digital financial technologies have influenced the working capital practices of MSMEs. This study examines the impact of law and AI on working capital management of MSMEs in Raigad District, Maharashtra. The study is based on primary data collected from 100 MSME owners and managers through a structured questionnaire, supported by secondary data from journals, government reports, statutory materials, and official publications. Simple statistical tools such as percentage analysis, tabulation, and comparison have been used for analysis. The findings show that 62% of MSMEs surveyed are aware of legal provisions such as the MSME Act and GST laws, while 38% still lack such awareness. Further, 75% of respondents reported that GST has a high to moderate impact on working capital due to advance tax payments and delays in input tax credit. The study also finds that 48% of MSMEs have adopted AI-based or digital tools, mainly for cash-flow forecasting, inventory management, and receivables control, while 52% have not yet adopted such tools. The distinct contribution of this study lies in examining the combined effect of legal regulation and AI adoption on MSME working capital at the district level, with specific reference to Raigad. The study concludes that legal awareness, timely compliance, and gradual adoption of AI-based financial tools can improve liquidity, reduce receivable delays, and strengthen the long-term sustainability of MSMEs.