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Big Boost to Ease of Doing Business- Passing of Bankruptcy Code; Code is a comprehensive and systemic reform which will give a quantum leap to the functioning of the credit market and would take India from among relatively weak insolvency regimes to becoming one of the world s best insolvency regimes; Vision of the new law is to encourage entrepreneurship and innovation

Big Boost to Ease of Doing Business- Passing of Bankruptcy Code; Code is a comprehensive and systemic reform, which will give a quantum leap to the functioning of the credit market and would take India from among relatively weak insolvency regimes to becoming one of the world s best insolvency regimes; Vision of the new law is to encourage entrepreneurship and innovation - News and Press Release - Dated:- 12-5-2016 - History was created on 11th May, 2016 when the Rajya Sabha passed the major Eco .....

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s due to Banks and Financial Institutions Act, 1993 and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, has not had desired outcomes. Similarly, action through the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) and the winding up provisions of the Companies Act, 1956 have neither been able to aid recovery for lenders nor restructuring of firms. Laws dealing with individual insolvency, the Presidency Towns Insolvency Act, .....

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sive solution, which would encompass borrowing by firms and by individuals. In recognition of the fact that major sub-components of lending are done by non-banks, in particular the corporate bond market which serve infrastructure projects, bankruptcy reforms needed to have a consistent treatment of default. While the systems of well-functioning advanced economies were studied, the design that was implemented for India reflects a careful judgment about what would work under India conditions. The .....

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cilitate the application of consistent and coherent provisions to different stakeholders affected by business failure or inability to pay debt. This law will thus promote entrepreneurship, availability of credit and balance the interest of all stakeholders. The vision of the new law is to encourage entrepreneurship and innovation. It is true that some business ventures will always fail, but such failures will be handled rapidly and swiftly. Entrepreneurs and lenders will be able to move on, inst .....

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idea of the new law is that when a corporate entity defaults on its debt, control shifts from the shareholders/promoters to a committee of creditors, who have 180 days (extendable by 90 days in deserving cases) to evaluate proposals from various players about resuscitating the company or taking it into liquidation. When decisions are taken in a time-bound manner, there is a greater chance that the corporate entity can be saved as a going concern, and the productive resources of the economy (lab .....

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