Bill To Amend Insolvency Law Introduced In Lok Sabha By FM Nirmala Sitharaman | Daily Current Affairs 2021

Bill To Amend Insolvency Law Introduced In Lok Sabha By FM Nirmala Sitharaman

Posted by
Subscribe for News Feed
Insolvency and Bankruptcy Code (Amendment) Bill 2021

Bankruptcy Code (Amendment) Bill 2021: Finance Minister Nirmala Sitharaman on 26th July 2021 introduced Insolvency and Bankruptcy Code (Amendment) Bill 2021 in Lok Sabha.

Note: Nirmala Sitharaman is in charge of both finance and corporate affairs ministries.

Key Details:

  • The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 was introduced amid Opposition ruckus over various issues.
  • The amendments seek to remove bottlenecks and streamline the corporate insolvency resolution process, wherein successful bidders will be ring-fenced from any risk of criminal proceedings for offenses committed by previous promoters of companies concerned.
  • The bill has been introduced to amend the insolvency law and provide for a pre-packaged resolution process for stressed MSMEs.
  • The Insolvency and Bankruptcy Code (Amendment) Bill, 2021 will replace the ordinance that was promulgated on April 4 by President Ram Nath Kovind on April 4 to amend the Insolvency and Bankruptcy Code (IBC), 2016 to offer a pre-packaged bankruptcy resolution scheme for small, micro, and medium businesses under the Code.
  • Generally, under a pre-packaged process, main stakeholders such as creditors and shareholders come together to identify a prospective buyer and negotiate a resolution plan before approaching the National Company Law Tribunal (NCLT).
  • All resolution plans under the IBC need to be approved by NCLT.
  • The Insolvency and Bankruptcy Code, which came into force in 2016, has already been amended thrice.
  • The Insolvency and Bankruptcy Code, 2016, sought to create a single law for bankruptcy and insolvency.
  • The latest changes pertain to various sections as well as the introduction of a new section.

Subscribe for News Feed