The Hon`ble Finance Minster in his Budget Speech of 2014-15 announced that an Entrepreneur friendly legal bankruptcy framework would be developed for SMEs to enable easy exit.

Pursuant to the above announcement, a Committee has been set up under the Chairmanship of Shri TK Vishwanathan, former Secretary General, Lok Sabha and former Union Law Secretary, to study the corporate bankruptcy legal framework in India and submit a report by February next year.

The Committee will examine the whole gamut of issues relating to bankruptcy including the following specific areas:

i.  Why bankruptcy matters?

ii. Early detection and resolution of finacial distress

iii. Protection of interest of stakeholders

iv. Study the rescue mechanism and suggest ways of improving it

v. Examine the role of the institutions engaged in the process of rescue and liquidation

vi. Liquidation procedurefor smaller companies

vii. Any other aspect relevant to the subject

Comments and suggestions on the proposed areas may be sent to Director (FSLRC), Department of Economic Affairs, Ministry of Finance, Room no. 68-A, North Block, New Delhi-110001 or via email on [email protected] within 30 days.

Bankruptcy reform for SMEs to enable easy exit; committee to study framework and invite public comments. A committee has been established to design an entrepreneur friendly bankruptcy framework for SMEs to enable easier exit, charged with examining early detection of financial distress, stakeholder protection, rescue mechanisms, roles of institutions in rescue and liquidation, and liquidation procedures for smaller companies. The committee invites comments and suggestions to the designated Director in the Ministry of Finance or by email within 30 days for incorporation into its study and recommendations.