The Insolvency and Bankruptcy Board of India has come out with regulations to fast-track the process for small companies, unlisted firms and start-ups.
The notified regulation gives a 90-day timeline to complete the exercise with an extension of 45 days. The norms have also been notified.
“The process in these cases shall be completed within a period of 90 days, as against 180 days in other cases. However, the adjudicating authority may, if satisfied, extend the period of 90 days by a further period up to 45 days for completion of the process,” a statement from the ministry of corporate affairs said.
“The idea behind the new regulation is to lower the time required for resolution for smaller entities such as small companies with paid up capital of less than Rs 50 lakh, startups (turnover of less than Rs 25 crore) and unlisted companies with reported total assets not exceeding Rs 1 crore,” said IBBI chairman M.S. Sahoo on the sidelines of an event of the Merchants’ Chamber of Commerce and Industry.