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Many MSME’s not registered as companies can lose the business

An ordinance was promulgated to amend the Insolvency and Bankruptcy Code (IBC) on April 4. The Centre has used the Ordinance route to introduce a pre-packaged insolvency resolution process (pre-pack) for companies classified as MSME’s. As per the ordinance, it is considered necessary to urgently address the specific requirements of Micro, Small and Medium Enterprises (MSMEs) relating to the resolution of their insolvency, due to the unique nature of their businesses and simpler corporate structures.
Owners of micro, small and medium enterprises (MSMEs) going into bankruptcy proceedings under a simplified regime rolled out this week could lose their business in certain cases if they do not match a better offer from a potential investor.

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