IBBI Proposes Reforms to Streamline MSME Resolution Process

New Delhi, September 3, 2024: Aiming to streamline the resolution process for Micro, Small, and Medium-Sized Enterprises (MSMEs), the Insolvency and Bankruptcy Board of India (IBBI) has proposed significant amendments to the Insolvency and Bankruptcy Code (IBC). The proposed reforms aim to facilitate MSMEs' participation in the resolution process by simplifying the registration and disclosure requirements.

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One of the main recommendations is to enable MSMEs to register using the Department for Promotion of Industry and Internal Trade's (DPIIT) streamlined online registration process, known as the Udyam Registration Scheme. This will lessen the administrative burden on MSMEs by removing the requirement for them to obtain individual certificates from various authorities.

Furthermore, the IBBI has suggested easing the disclosure obligations for MSMEs involved in resolution procedures. The board thinks that by easing the standards, more MSMEs will feel more comfortable participating in the resolution process without worrying about being overly scrutinized.

The proposed amendments are expected to significantly reduce the time and cost associated with MSME resolution proceedings. By simplifying the registration and disclosure requirements, the IBBI aims to create a more conducive environment for the resolution of stressed MSMEs.

Final Thought: It is a positive step that the IBBI is proposing to simplify the MSME resolution process by reforming disclosure and registration. The board is promoting greater involvement in the resolution process by lessening the administrative burden on MSMEs, which may ultimately strengthen the Indian economy.