The Centre on Monday introduced a bill in Lok Sabha for providing a resolution process for financially stressed micro, small and medium enterprises.
The Centre on Monday introduced a bill in Lok Sabha for providing a resolution process for financially stressed micro, small and medium enterprises (MSMEs), especially those which have been affected by the Coronavirus pandemic.
The bill will amend the insolvency law and offer what is being termed, a pre-packaged resolution process for such small enterprises.
The proposed amendments would help notify the threshold of a default not exceeding ₹ 1 crore for initiation of pre-packaged resolution process. The Centre has already prescribed the threshold of ₹ 10 lakh for this purpose.
The Insolvency and Bankruptcy Code (Amendment) Bill, 2021, which was introduced by Finance Minister Nirmala Sitharaman, will replace the ordinance that came into effect on April 4, 2021 to provide relief for pandemic affected MSMEs.
The bill seeks to have a new chapter in the Code to facilitate pre-packaged insolvency resolution process for corporate persons that are MSMEs.
