Parents arrived to drop their children off at nursery to discover it had closed.
The Old School Nursery, in Kibworth, is understood to have shut without notice on Friday, November 2. A sign on the door now says it is no longer in business.
It is not known if the closure is a direct consequence of a critical Ofsted inspection report.
Some parents discovered the news last week, but others arrived on Monday to find the building shut.
County councillor for the village, Dr Kevin Feltham, said: "The sudden closure has come as a shock to us all.
"I understand a few of the parents received text messages over the weekend while the others turned up with their children on Monday morning to find the doors shut."
He said there were other nurseries in the area, but added: "I don't believe they have spaces available for babies. It is also a pity for those people who have lost their jobs."
Inspectors, who visited the private nursery at the end of September, found staff had a limited understanding of the requirements of the early years foundation stage.
They said there were weaknesses in safety practice, such as passing hot plates over children's heads at the dinner table, and staff were inadequately trained to deal with regulatory issues.
Inspectors said there were "weaknesses in the leadership and management" of the nursery and that they failed to notify Ofsted of a significant event in relation to a child's illness.
In addition, the report said regular monitoring of staff performance was not taking place. However, inspectors did say children were happy and had positive relationships with staff.
They also said a reasonable range of activities and learning opportunities was provided.
The nursery, which was registered last year, catered for about 60 children aged eight weeks to four years and employed 11 staff.
At its first inspection in October, 2011 it was rated "satisfactory" by Ofsted.
The Mercury attempted to contact manager Rosalyn Martin but was unsuccessful.
An employee at another nursery in the village, who didn't wish to be named, said: "As far as I know, the Old School Nursery shut last Friday and that was that."
She said she believed parents were organising a meeting to discuss what had happened.