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3 MUST KNOW FACTS ABOUT THE INSOLVENCY AND BANKRUPTCY CODE 2015

January 24, 2022by admin0

The government of India has pushed, the Insolvency and Bankruptcy Code 2015. This bill aims to improve the ease of doing business and reduce obstructions in the Indian startup ecosystem.

The proposed law will help potential entrepreneurs to start or exit from the startup business hassle free. This law combine with the 1 day Incorporation proposal of Ministry Of External Affairs is expected to revamp ease of doing business in India.

‘’Entrepreneurs should find it easy to start-up a business as much as to get out of startups because if you are not doing well there shouldn’t be a taboo.’’ Nirmala Sitaraman, Commerce and Industries Minister

Fact # 2

Given that the US insolvency law contributes to cutting-edge innovation and risk taking among entrepreneurs in America. Such a law is also essential for India startup ecosystem to blossom because when their ventures fail law should support those brave businessmen.

The government should communicate that failing is ok and it must support the risk-taking girth of entrepreneurs. Supporting business expansion is one viable way to employ the burgeoning Indian young population.

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDB) this law helped lenders to recover loans briskly from a failed businesses. It focused on prorate allotment of properties of defaulting party. It didn’t really lessen the pain of the entrepreneur.

Fact # 3

Too many formalities to exit a business has hampered ease in doing business here. It isn’t really reasonable to ask business owners to pay more legal and compliance fees for exiting an unprofitable business. Such laws will reduce risk taking the mentality of entrepreneurs will, in turn, demotivate job creators in India.

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