Amendments under Insolvency and Bankruptcy (Voluntary Liquidation Process) Regulations, 2017

Amendments under Insolvency and Bankruptcy (Voluntary Liquidation Process) Regulations, 2017

The Insolvency and Bankruptcy Board of India has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2020 effective from the 5th day of August 2020.

The amendments have been made in Regulation 5 concerning the appointment of the liquidator. It states that the corporate person shall appoint an Insolvency Professional as liquidator, and, wherever required, may replace him by appointing another insolvency professional as liquidator, by a resolution passed under Section 59(3)(c) of the Insolvency and Bankruptcy Code, 2016 or Regulation 3(1)(c) of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, as the case may be. However, such resolution must contain the terms and conditions of the appointment of the liquidator, including the remuneration payable to him.

The Insolvency Professional shall, within 3 (three) days of his appointment as liquidator, intimate the Insolvency and Bankruptcy Board of India about such appointment.

The complete text of the regulations can be viewed at:

https://ibbi.gov.in/uploads/legalframwork/41dae71b62c3fa756602c8fec7848b58.pdf

Clarification concerning criteria for the classification of enterprises as Micro, Small & Medium Enterprises

Upon receipt of various representations seeking clarifications on the Notification No. S.O. 2119(E) dated the 26th day of June 2020 issued by the Ministry of Micro, Small & Medium Enterprises (MSME) regarding criteria for the classification of enterprises as Micro, Small & Medium Enterprises and their registration in Udyam Portal, the Ministry of MSME has issued an Office Memorandum on 6th day of August 2020 clarifying the validity of the existing Entrepreneurs Memorandum (EM) Part-II, Udyog Aadhaar Memorandum (UAM) – I and New Udyam Registration.

It is hereby clarified as under:

1. That all the existing EM Part II and UAMs obtained till the 30th day of June 2020 shall remain valid till the 31st day of March 2021.

2. There are also doubts about whether existing UAM holders may edit or amend their details on the UAM portal. It is clarified that the same can be done until the 31st day of March 2021. Those enterprises that have not entered their Aadhaar or PAN number so far in the UAM portal are hereby advised to obtain Udyam Registration Number well before, 31st day of March 2021.

3. It is further clarified that online Form for Udyam Registration captures depreciated cost as on 31st March each year of the relevant previous year for Value of Plant and Machinery or Equipment. Therefore, the value of Plant arid Machinery or Equipment’s for all purposes shall mean the Written Down Value (WDV) as at the end of the Financial Year as defined in the Income Tax Act, 1961 and not the cost of acquisition or original price, which was applicable in the context of the earlier classification criteria.

The complete text of the office memorandum dated 6th day of August 2020 can be viewed at:

https://msme.gov.in/sites/default/files/Clarification_on_existing_EM.pdf

Last Updated: 14th August 2020 This article is contributed by: 

Luv Malhotra Senior Manager, Legal

Tag: Insolvency and Bankruptcy