The Insolvency and Bankruptcy Board of India (IBBI) notified the regulations for the recently announced pre-packaged insolvency resolution process.
The Insolvency and Bankruptcy (pre-packaged insolvency resolution process) Rules, 2021 has been introduced to provide an easier path to resolution for stress Micro, Small, and Medium Enterprises (MSMEs).
As per the new rules the a corporate applicant, shall make an application for initiating pre-packaged insolvency resolution process under sub-section (1) of section 54C of the Code in Form 1, accompanied with affidavit, documents or records as referred in Annexures therein, in electronic form, along with a fee of rupees fifteen thousand:
Provided that in case, electronic facility is not available for filing such application, the application and the accompanying documents may be filed in physical form, and wherever the accompanying documents are bulky, the same may be submitted in scanned portable document format in a data storage device such as a compact disc or a USB flash drive acceptable to the Adjudicating Authority.
The corporate applicant shall serve a copy of the application to the Board by registered post or speed post or by hand or by electronic means, before filing it with the Adjudicating Authority.
The application shall be filed before the Adjudicating Authority in accordance with rules 20, 21, 22, 23, 24 and 26 of the National Company Law Tribunal Rules, 2016.
A corporate applicant shall inform the Adjudicating Authority about the filing of any winding up petition against the corporate debtor after becoming aware about such filing.
According to the rules, an insolvency professional can be appointed as resolution professional if they are independent of the corporate debtor blocking any person or entities that are related to the debtor. The rules specify that the resolution professional and all partners and directors of the insolvency professional entity have to be independent of the debtor.
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