NEW DELHI: The government has amended the Insolvency & Bankruptcy Code to provide for prepackaged resolution framework for micro, small and medium enterprises (MSMEs) through promulgation of an ordinance.
The alternative insolvency resolution framework is expected to bring about a quicker and more cost-effective process for MSMEs that would maximise value while being least disruptive to business, according to the ordinance, issued late Sunday.
Prepackaged insolvency resolution is seen advantageous as a resolution plan can be settled upon outside of court, leading to fewer business disruption costs, lower legal and procedural costs and less time in court.