Parliament passed the Insolvency and Bankruptcy Code (Amendment) Bill, 2020, on 12 March 2020. It was earlier passed in Lok Sabha on 6 March. The Bill will now replace an ordinance passed in 2019.
♦ The amendments will introduce a mechanism to incorporate viable changes in the legislation.
♦ The Bill will remove bottlenecks and streamline the corporate insolvency resolution process.
♦ It aims to provide protection to new owners of a loan defaulter company against prosecution for misdeeds of previous owners.
♦ The creditors can initiate an insolvency resolution process if a company defaults on its payments.
♦ It empowers the resolution professional to require suppliers to continue providing goods and services.
♦ The Bill provides that the company will not be liable for any offence committed prior to the insolvency resolution process if there is a change in the management or control of the company.