RIGHTS OF SMALL BUSINESSMAN / INVESTORS STANDS JEOPARDIZED ??

 

Companies Act, Liquidation, Insolvency

Insolvency and Bankruptcy Code (IBC), like the Companies Act, has given a Right to the Debtors to initiate Liquidation / Winding-up of a Company if the said Company fails to pay its debt exceeding Rs. 1 Lakhs.

Winding up meaning that the assets of the company will be sold and the proceeds will be utilized to pay off its liabilities.

This provision safeguards the interest of creditors as well as the General Public in as much as these companies have limited liabilities, meaning thereby that the directors / shareholders cannot be made personally liable for the debts of the company, thereby making the position of a creditor very venerable.

IBC AMENDMENT AGAINST SMALL BUSINESSMAN / INVESTORS

Now with the recent amendment dated 24-03-2020, only creditors exceeding value of Rs.1 Crore are entitled to initiate winding up proceedings against the company. By this amendment government has adversely effected the rights of SMALL Traders, Businessman, Investors and the likes.

By this amendment government has made the legal recourse of recovery of money from corporate a tedious task for the common man, SMALL Traders, Business man, Investors and the likes, who, now, have to follow the lengthy legal procedure which may take years for recovery of their hard earned money.

Recovery of Money is a question of survival for Small Business. it is very unfortunate that GOI has given a free hand to Large Corporates to not to get liquidated even if they choose not to pay small business.  

In case , you need any clarification / assistance / help, please feel free to contract me on my whatsapp number. i will be happy if you can leave your comments below in this respect. 

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