Government of India, GoI has promulgated via the President, an ordinance further to amend the Insolvency and Bankruptcy Code, IBC 2016.
The ordinance was published in the Gazette of India Sunday (4 April).
The ordinance will make insolvency resolution easier and faster for Micro, small and medium, MSME using a 'pre-packaged' process.
"MSME enterprises are critical for India's economy as they contribute significantly to its gross domestic product and provide employment to a sizeable population. It is considered necessary to urgently address the specific requirements of micro, small and medium enterprises relating to the resolution of their insolvency, due to the unique nature of their businesses and simpler corporate structures," the government ordinance said as reported by Moneycontrol.
Some key points related to the package are:
Approval required by not less than 66 per cent of the creditors
The whole resolution process to be completed within 120 days.
Default threshold may be specified later by the government (not more than one crore)
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