The Insolvency of Bankruptcy Code, 2016 (the "Code") continues to be the focus of the legislature on addressing the operational and implementation challenges faced by various market participants. With this objective, the Insolvency Law Committee ("ILC") was also constituted to, inter-alia, review the implementation of Code and make suitable recommendations from time to time. Since the enactment of the Code, there have been five key legislative interventions and various other amendments primarily intended to have an effective resolution mechanism which is in line with market realities and is tailored for specific stakeholders. Now, to further this objective vis-a-vis micro, small and medium enterprises ("MSME") which have gained a prominent place in contributing top the country's economy (including inline with the Atmanirbhar Bharat Initiative of 2020) the Code has been amended by way of an ordinance on April 04, 2021 ("2021 Ordinance") read with the Insolvency and Bankruptcy of India (Pre-Packaged Insolvency Resolution Process ) Regulations, 2021 ("PP IRP Regulations") and Insolvency and Bankruptcy (Pre-Packaged Insolvency Resolution Process) Rules, 2021 ("PP IRP Rules").
Broadly, the 2021 Ordinance provides for a tailored and the alternative resolution process for MSMEs as the 'Pre- Packaged Insolvency Resolution Process' ("Pre-Packaged IRP"/"PPIRP").
Anand Srivastava, Partner, Link Legal
Namita Das, Partner, Link Legal
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