Revising Insolvency Bankruptcy Code of India – as Assured Can It Foster Entrepreneurship – a Case of Msme and Start-ups
Year: 2024
Type: article
Abstract: In 2016, the Parliament of India passed the Insolvency and Bankruptcy Code, which stands as a single resolution framework covering both corporate and individual distress for all such firms of India.However, Medium and Small Enterprises and Start-up businesses encounter specific challenges that lead to their distress and insolvency.The present work argues that there should be a separate provision in the code accommodating resolution by taking up changes to the management for MSMEs and scalable start-ups in lieu of liquidation.Presenting a distressed enterprises 'journey map' the present work suggests cohesive changes to the Insolvency and Bankruptcy Code of India that makes it a suitor for all the enterprises that are in distress that currently stands as a missing link in the present form of IBC.The current work stands as a ready reckoner of IBC's suitability to MSME's in India.This analysis foregrounds the relationship between valuation of an MSME and the IBC process to highlight the ineffectiveness of the latter to create a healthy resolution scenario.The work concludes that a ho rizon expansion of the banks from mere recovery agents to resolvers or say matchmakers of the industry might see a light at the end of the tunnel for Pre-packaged Insolvency Resolution Plan (PPIRP).In the current form a great deal of settlements of PPIRP are out of the legal system.To conclude the work proposes a roleplay of angel investor by the banks in matchmaking and finding a new investor in protecting the intangible assets such as innovations of the business through patent filing.
Source: Corporate Governance Insight
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4406937303