As part of measures for promotion of Manufacturing and services sector in India, significant developments have been announced in the recent budget speech by the Finance Minister (FM) by introducing several initiatives aimed at streamlining corporate processes and enhancing the efficiency of insolvency resolution. Below are the key highlights:
A. Extension of C-PACE services:
- The Centre for Processing Accelerated Corporate Exit (C-PACE) will now offer its services for the voluntary closure of Limited Liability Partnerships (LLPs).
- This extension is designed to reduce the time required for the closure of LLPs by enabling a faster strike-off process, as provided under the LLP Rules, 2009.
- The establishment of C-PACE was initially announced in the 2022 budget, and the Ministry of Corporate Affairs (MCA) subsequently set up the center on 17 March 2023 to handle voluntary closures of companies under section 248 of the Companies Act, 2013.
- Amendments to the Companies (Removal of Names of Companies from the Register of Companies) Rules were made to facilitate this process.
B. Integrated technology platform for IBC:
- An Integrated Technology Platform will be established to improve the outcomes under the Insolvency and Bankruptcy Code (IBC).
- The platform aims to ensure consistency, transparency, timely processing, and better oversight for all stakeholders involved in insolvency proceedings.
C. Expansion of NCLT tribunals:
- The FM has proposed the establishment of additional National Company Law Tribunal (NCLT) tribunals.
- Some of these tribunals will be designated to exclusively handle cases under the Companies Act, enhancing the focus and efficiency of corporate litigation.
Note: This proposal, as referenced in the budget speech, is not part of the finance bill. Formal provisions will be notified by the Central Government through subsequent amendments or circulars.
