The Finance Bill, 2022 introduces amendments to provide clarity and reduce protracted litigation for entities undergoing business succession / reorganisation.
The Government has been making consistent efforts to simplify and rationalise the tax framework in India. Accordingly, the Finance Bill, 2022 (Bill) proposes several amendments to address practical nuances and anomalies arising in business successions/reorganisations.
The Indian distressed assets sector has seen sustained interest from investors due to several legal developments over the past few years. While the outcomes so far have been a mixed bag, a flexible approach and consistent regulatory focus on resolving distressed assets promises to unleash the potential in the sector.
The original version of this article was first published in the Trilegal Quarterly Roundup.
We are happy to present the second issue of our e-magazine – Trilegal Quarterly Roundup.
The Government of India has introduced a slew of legislative, regulatory and financial measures to support the MSME sector amidst the financial crisis created by the COVID-19 pandemic.
Background
The Micro, Small and Medium Enterprises Development Act, 2006 (MSME Act) provides a raft of protections and incentives for micro, small and medium enterprises (MSMEs).
The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 suspends the applicability of Section 7, 9 and 10 of the Insolvency and Bankruptcy Code for 6 months to protect corporate entities defaulting on payment obligations during the Covid-19 pandemic.
Introduction
The Insolvency and Bankruptcy Code passed by the Parliament is a welcome overhaul of the existing framework dealing with insolvency of corporates, individuals, partnerships and other entities. It paves the way for much needed reforms while focussing on creditor driven insolvency resolution.
BACKGROUND
Presently, prior to a listed Indian company filing a scheme (Scheme) before the High Court for merger/de-merger/amalgamation/reduction of capital (Reconstruction) under the Companies Act, 1956 (Companies Act), it is required to first submit the Scheme to the stock exchange for approval. Upon successful completion of the Reconstruction, the company must ensure that at least 25% of its post-issue capital is offered and allotted to the public.