26 June 2017
INDIA: Debts Owed by Smaller Companies Now Recoverable in 90 Days
The insolvency debt recovery period has now been fast-tracked in the case of start-ups and small companies. While it currently takes 180 days to complete the process for all insolvent companies, creditors will now be able to recover debts from smaller companies in just 90, with a one-off 45 day extension possible subject to approval by the National Company Law Tribunal.
This fast-tracked debt recovery will apply in all instances where the defaulting company has a share capital of less than INR5 million (US$77,500), annual revenue below INR20 million and total borrowings of less than INR20 million. Any unlisted company reporting total assets of less than INR10 million in the previous financial year will also be deemed eligible for the fast-tracked process. This latest change follows a May 2016 ruling that saw the debt recovery period in India cut from four years to 180 days.
For further details, see: Insolvency Debt Recovery Period in India Slashed from Four Years to 180 Days.