The Finance Minister Nirmala Sitharaman on Monday introduced a Bill in the Lok Sabha to provide statutory backing to pre-packaged insolvency resolution process (pre-pack) regime for companies classified as micro, small and medium enterprises (MSMEs).
This Bill Insolvency and Bankruptcy Code (amendment ) Bill 2021 once passed by Parliament would replace an ordinance that Centre had promulgated in April this year for introduction of pre-packaged insolvency for MSMEs.
Currently, India has about 6-7 lakh companies that are classified as MSMEs and potentially these many could benefit from the newly introduced pre-packaged insolvency framework.
The objective of introducing pre-pack for MSMEs is that it is a cost-effective mechanism and quick…
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