Threshold Limit to Invoke Corporate Insolvency Resolution Process Increased

It has been announced that the threshold limit to invoke insolvency under Section 4 of the Insolvency and Bankruptcy Code, 2016 (“Bankruptcy Code”) will be increased from Rs.1 lac to Rs.1 crore to prevent triggering of insolvency proceedings against MSMEs. This has been done on account of the large-scale economic / financial distress faced by most companies due to the COVID-19 pandemic.

The aforesaid change has been effected vide a notification issued by the Ministry of Corporate Affairs dated March 24, 2020.