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Home NEWS Government amended insolvency law for MSME, know how it will benefit

Government amended insolvency law for MSME, know how it will benefit

An ordinance has been issued on 4 April to amend the Insolvency and Bankruptcy Code (IBC).

MSME

The government has amended the Insolvency Law. Under this, a pre-packaged solution process has been proposed for Micro, Small and Medium Enterprises (MSME). According to a notification, an ordinance has been issued on 4 April to amend the Insolvency and Bankruptcy Code (IBC). The moratorium of some provisions of the IBC has ended about two weeks ago. Some provisions of the IBC were postponed in view of the bottlenecks in economic activity caused by the Coronavirus Pandemic. Under this, there was a ban on starting a new case under the IBC for one year from March 25, 2020.

According to the ordinance, due to the nature of business of MSMEs and their easy corporate structure, a need was felt to make some special arrangements for settlement of insolvency matters related to MSMEs. In such a situation, an efficient and alternative insolvency resolution process was required for MSMEs.

This will provide a fast, cost-efficient and maximum value-ensuring solution for all stakeholders. The ordinance states that in view of this, a pre-packaged solution process has been introduced for MSMEs.

Saumitra Mazumdar, partner of J Sagar Associates, said that a pre-packaged route has been made available for correct and practical cases from the IBC Amendment Ordinance-2021. This will cause the least hindrance in business. IBC provides time-bound solutions to market-linked and stressed assets.

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Bhagyashree Soni
Bhagyashree Soni is a software engineer with soft writing skills. She is a degree holder from the International School of Entrepreneurial Leadership. She has been a state-level badminton champion and chess player. A woman with a forthright attitude enjoys her writing passion as her chosen career. Writing in the context of feminism, social-cause and entreprenurship is her forte.

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