Skip to main content

Proprietary firms to come under bankruptcy code

By

After making the insolvency process easier for companies

After making the insolvency process easier for companies, the focus is now turning to proprietary firms.The NITI Aayog will have a meeting, in this regard, with the Insolvency and Bankruptcy Board (IBB), the ministry of small and medium enterprises and insolvency professionals on Wednesday.

An official said, “NITI Aayog wants to expedite this process as the current provisions only allow companies and limited liability partnerships to file for insolvency.” IBB plans to notify the bankruptcy provisions in the Insolvency and Bankruptcy Code (IBC).

At least 90 per cent of small firms are proprietary firms, said insolvency professionals. Once the bankruptcy provisions are notified, these proprietary firms will benefit, as IBB plans to consider them as individuals.

The IBB plans to notify the bankruptcy code in three phases. The first will be of corporate guarantors. In the second phase, an individual with proprietary business will be included and in the last phase, the insolvency regulator will frame rules for individuals.

A bankruptcy law will help individuals who now have to go to district courts for the process, which is tedious and time consuming. Insolvency professionals state that filing bankruptcy takes many months.

Recently, the government notified fast-track resolution process for start-ups, bringing down the resolution time to 90 days, from 180 days.So far, the IBB has notified the sections pertaining to cross-border insolvency.

However, the rules haven’t been framed yet. The government is consulting the industry for recommendations on what the rules should be.

Business Standard New Delhi, 05th July 2017

Comments

Post a Comment

Popular posts from this blog

Household debt up, but India still lags emerging-market economies: RBI

By
  Although household debt in India is rising, driven by increased borrowing from the financial sector, it remains lower than in other emerging-market economies (EMEs), the Reserve Bank of India (RBI) said in its Financial Stability Report. It added that non-housing retail loans, largely taken for consumption, accounted for 55 per cent of total household debt.As of December 2024, India’s household debt-to-gross domestic product ratio stood at 41.9 per cent. “...Non-housing retail loans, which are mostly used for consumption purposes, formed 54.9 per cent of total household debt as of March 2025 and 25.7 per cent of disposable income as of March 2024. Moreover, the share of these loans has been growing consistently over the years, and their growth has outpaced that of both housing loans and agriculture and business loans,” the RBI said in its report.Housing loans, by contrast, made up 29 per cent of household debt, and their growth has remained steady. However, disaggregated data sho...
Post a Comment
Read more

External spillovers likely to hit India's financial system: RBI report

By
  While India’s growth remains insulated from global headwinds mainly due to buoyant domestic demand, the domestic financial system could, however, be impacted by external spillovers, the Reserve Bank of India (RBI) said in its half yearly Financial Stability Report published on Monday.Furthermore, the rising global trade disputes and intensifying geopolitical hostilities could negatively impact the domestic growth outlook and reduce the demand for bank credit, which has decelerated sharply. “Moreover, it could also lead to increased risk aversion among investors and further corrections in domestic equity markets, which despite the recent correction, remain at the high end of their historical range,” the report said.It noted that there is some build-up of stress, primarily in financial markets, on account of global spillovers, which is reflected in the marginal rise in the financial system stress indicator, an indicator of the stress level in the financial system, compared to its p...
Post a Comment
Read more

Retail inflation cools to a six-year low of 2.82% in May on moderating food prices

By
  New Delhi: Retail inflation in India cooled to its lowest level in over six years in May, helped by a sharp moderation in food prices, according to provisional government data released Thursday.Consumer Price Index (CPI)-based inflation eased to 2.82% year-on-year, down from 3.16% in April and 4.8% in May last year, data from the Ministry of Statistics and Programme Implementation (MoSPI) showed. This marks the fourth consecutive month of sub-4% inflation, the longest such streak in at least five years.The data comes just days after the Reserve Bank of India’s (RBI) Monetary Policy Committee cut the repo rate by 50 basis points to 5.5%, its third straight cut and a cumulative reduction of 100 basis points since the easing cycle began in February. The move signals a possible pivot from inflation control to supporting growth.Food inflation came in at just 0.99% in May, down from 1.78% in April and a sharp decline from 8.69% a year ago.A Mint poll of 15 economists had projected CPI ...
Post a Comment
Read more