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How To Get Food Processing Enterprises Subsidy Under PMFME Scheme in Rajasthan

Posted on by Fastlegal Team

In this article we will Discuss about Food Processing Business Subsidy in Rajasthan under PMFME Scheme. If any entprenuer wants to setup Food Processing Business than he can apply for Subsidy under the PMFME Scheme in Rajasthan

Food Processing Business Subsidy

How much Food Processing Business Subsidy is provided by Government :

Individual micro food processing units would be provided capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10.0 lakh per unit.

What is Eligible Project Cost to Avail Food Processing Business Subsidy :

  • It includes
  • Cost of Plant & Machineries
  • Technical Civil Work (Maximum 30% of Eligible Project Cost)
  • Excludes Cost of land/rental or lease work shed.

Quantum of Loan :

The project under this scheme shall be eligible for a loan up to 90% of the estimated/actual project cost on submission of viable projects be eligible beneficiaries.

Owner contribution should be a minimum of 10% of the eligible project cost.

Eligibility criteria for individual micro Food Processing Enterprises :

  • Eligible for both existing and new micro food processing enterprises for expansion/up gradation of existing food processing enterprises or setting up of new micro food processing enterprises are eligible under this scheme.
  • Food Processing means any operation that manufactures/process food for human and animal consumption.
  • Micro food processing enterprises means food processing units in operations with investment not exceeding Rs.1 crore and turnover not exceeding Rs.5 crore.
  • The enterprise should be unincorporated and should employ less than 10 workers
  • The applicant should have an ownership rights of the enterprise.
  • Ownership status of the enterprise could be proprietary / partnership firm/Pvt Limited Company/ FPO/NGO/SHG/Co-Operative.
  • The applicant should be above 18 years.
  • Only one person from one family would be eligible for obtaining financial assistance. The “family” for this purpose would include self, spouse and children
  • Willingness to formalize and contribute10% of project cost and obtain Bank loan

Documents Required for getting subsidy/Loan:

  • PAN Card
  • Photo & Copy of Aadhaar card of all promoters/partners/directors
  • Address Proof (Not before 2 months) i.e. Electricity, telephone, Water Bill etc.
  • Description of unit/factory
  • 6 months’ Bank Statement
  • Quotations of Plant & Machineries
  • Estimates for  enterprises  building shed
  • In principle approval letter from the bank

Not Eligible Food Processing Enterprises Subsidy

  • Trading & selling of unprocessed Millets/Cereals/Spices etc.
  • Unprocessed or loose milk ( Selling of Milk/Curd)
  • Trading and selling of fruits and vegetables
  • Trading and selling of unprocessed minor forest products
  • Bee Keeping/Loose selling of Honey
  • Loose selling, trading and repacking of Oil
  • Trading and selling of groundnut, Areca nut.
  • Poultry, Piggery, Goatry or and rearing activity of animals
  • Trading and selling of fresh fish/meat/chicken etc.
  • Repacking of manufacturing products.
  • Canteen, grocery, hotel, Tiffin services, restaurant or any others food service enterprises.
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How to Apply for Voluntary Liquidation of Company Under IBC

Posted on by Fastlegal Team

Insolvency and Bankruptcy Code provides Voluntary Liquidation of Corporate Persons in India, A corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under Chapter V of Insolvency and Bankruptcy Code (IBC) , Section 59 of IBC provides for Voluntary Liquidation of Corporate Persons.

Procedure for Voluntary Liquidation of Company Under IBC

Voluntary liquidation proceedings of a corporate person registered as a company shall meet the following conditions:

  • A declaration from majority of the directors of the company verified by an affidavit stating that –
    • (i) they have made a full inquiry into the affairs of the company and they have formed an opinion that either the company has no debt or that it will be able to pay its debts in full from the proceeds of assets to be sold in the voluntary liquidation; and
    • the company is not being liquidated to defraud any person
  • Above Declaration shall be accompanied by :
    • Audited financial statements and record of business operations of the company for the previous two years or for the period since its incorporation, whichever is later
    • a report of the valuation of the assets of the company, if any prepared by a registered valuer
  • Within Four Weeks of Above Declaration there shall be a special resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily and appointing an insolvency professional to act as the liquidator, or
  • A resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company shall be dissolved, as the case may be and appointing an insolvency professional to act as the liquidator
  • Where Company Owes any Debt to any Person :
    • creditors representing two thirds in value of the debt of the company shall approve the resolution passed under sub clause (c) within seven days of such resolution (Special or Ordinary Resolution as mentioned above)

Reporting to Registrar of companies and Board about Voluntary Liquidation Process by Company:

  • within seven days of such resolution or the subsequent approval by the creditors, as the case may be

The voluntary liquidation proceedings in respect of a company shall be deemed to have commenced from the date of passing of the above resolution subject to the approval of Creditors of Company

  • Once the Above is complete,
  • The liquidator shall receive or collect the claims of creditors within a period of thirty days from the date of the commencement of the liquidation process
  • The Financial and Operational Creditor will submit the claims.
  • A creditor may withdraw or vary his claim under this section within fourteen days of its submission
  • The liquidator will verify the claims submitted
  • The liquidator may, after verification of claims, either admit or reject the claim
  • The liquidator will communicate his decision of admission or rejection of claims to the creditor and corporate debtor within seven days of such admission or rejection of claims
  • The liquidator will determine the value of claims admitted

Distribution of assets in case of Liquidation of Company:

  • The proceeds from the sale of the liquidation assets shall be distributed in the following order of priority : –
  • The insolvency resolution process costs and the liquidation costs paid in full;
  • The following debts which shall rank equally between and among the following:
    • workmen’s dues for the period of twenty-four months preceding the liquidation commencement date; and
    • debts owed to a secured creditor in the event such secured creditor has relinquished security
  • wages and any unpaid dues owed to employees other than workmen for the period of twelve months preceding the liquidation commencement date;
  • financial debts owed to unsecured creditors;
  • the following dues shall rank equally between and among the following: –
    • any amount due to the Central Government and the State Government including the amount to be received on account of the Consolidated Fund of India and the Consolidated Fund of a State, if any, in respect of the whole or any part of the period of two years preceding the liquidation commencement date;
    • debts owed to a secured creditor for any amount unpaid following the enforcement of security interest
  • any remaining debts and dues;
  • preference shareholders, if any; and
  • equity shareholders or partners, as the case may be

 

Where the affairs of the corporate person have been completely wound up, and its assets completely liquidated, the liquidator shall make an application to the Adjudicating Authority (NCLT) for the dissolution of such corporate person

The Adjudicating Authority shall on an application filed by the liquidator pass an order that the corporate debtor shall be dissolved from the date of that order and the corporate debtor shall be dissolved accordingly

A copy of an order of dissolution shall within fourteen days from the date of such order, be forwarded to the authority with which the corporate person is registered (ROC) .

 

Need Voluntary Liquidation Services for your Company – Please Email us at Support@fastlegal.in or call at 9782280098

 

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LLP Form 8 Filing Date Extended to 30th December 2021

Posted on by Fastlegal Team

MCA Relaxes Levy of Additional Fee in case of delay in Filing of LLP Form 8 (the Statement Account and Solvency) by LLP for the financial year 2020-21.

MCA issued a Circular, in which MCA announced a relaxation on additional fees in filing Form 8 by LLP up to 30th December 2021. Due to the difficulty faced by LLPs as a result of the COVID-19 epidemic, MCA has received a request for an extension of the deadline for completing the Statement of Account and Solvency without paying additional expenses.

LLP Form 8

The MCA has decided to allow LLPs to file Form 8 (the Statement of Account and Solvency) for the Financial Year 2020-2021 without paying additional fees until December 30, 2021, as part of the government’s ongoing efforts to promote ease of living and compliance for Micro, Medium and Small Enterprises doing business through the vehicle of LLP

Small LLP Incorporation

Enrich your business.

  • Name Approval
  • DIN
  • DSC
  • LLP Agreement *
  • PAN /TAN of LLP
  • Capital Contribution Up to Rs. 1 Lakh *

*Stamp duty up to Rs. 2000 included in this package

Rs. 9999 /-

LLP Annual Filing

Small LLP without Audit Applicability

  • LLP Form 11
  • LLP Form 8
  • DIN KYC
  • Income Tax Return
  • Book-keeping & Final Accounts up to 100 Entries

Rs. 8000/- Per year

LLP Annual Filings

Other than Small LLP

  • LLP Form 11
  • LLP Form 8
  • DIN KYC
  • Income Tax Return
  • Book-keeping
  • Audit

Request

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Step-by-Step Guide: Establishing a Café Business in India

Posted on by Fastlegal Team

In this article we will discuss about the process of setting up a café business in India, cafe business in india requires careful planning and adherence to legal requirements. This step-by-step guide provides a serious tone, focusing on the necessary procedures, licensing obligations, and financial considerations.

Step 1: Conceptualize Your Café

  • Define your target audience, theme, and menu.
  • Conduct thorough market research, analyzing café trends and studying competitors.
  • Create a detailed budget, estimating start-up costs and ongoing expenses.

Step 2: Business Registration and Licenses

  • Choose an appropriate business structure such as sole proprietorship, partnership, LLP, or Pvt Ltd company.
  • Register your café as a legal entity with the Registrar of Companies, if necessary.
  • Obtain the required licenses and permits, including:
    • Food License: Apply for a Food Safety and Standards Authority of India (FSSAI) license. Refer to the FSSAI website for comprehensive information and guidance.
    • Shop and Establishment Act License: Register your café based on the respective state’s Shops and Establishment Act.
    • Gumasta License: Complete registration with the municipal corporation or local municipality.
    • Fire Department NOC: Obtain a No Objection Certificate from the local fire department to demonstrate compliance with fire safety regulations.

Step 3: Location and Infrastructure

  • Identify a suitable location that aligns with your target audience and ensures convenience.
  • Take into account factors such as footfall, parking availability, and proximity to other establishments.
  • Establish the necessary physical infrastructure, including interior design, furniture, kitchen equipment, and utilities.

Step 4: Hiring and Staffing

  • Determine the required staff roles, such as chefs, servers, cashiers, and cleaners.
  • Advertise job openings, conduct interviews, and provide comprehensive training.
  • Ensure compliance with labor laws and prioritize the creation of a safe working environment.

Step 5: Menu Creation and Vendor Selection

  • Develop a well-designed menu that caters to your target audience’s preferences.
  • Establish relationships with reliable vendors to ensure the procurement of high-quality ingredients.
  • Consider incorporating local specialties and seasonal offerings to enhance the appeal of your menu.

Step 6: Marketing and Promotion

  • Devise a compelling brand identity, encompassing a unique name, logo, and carefully designed visual elements.
  • Create an online presence through an engaging website and establish a presence on relevant social media platforms.
  • Utilize digital marketing strategies, such as content creation, search engine optimization (SEO), and targeted advertising.
  • Supplement your efforts with traditional marketing techniques, including print media and localized promotions.

Step 7: Operations and Customer Service

  • Implement efficient operational procedures for streamlined order taking, food preparation, and exceptional customer service.
  • Prioritize delivering outstanding customer experiences and strive to continuously improve through feedback and market insights.

Step 8: Revenue and Profit

  • Projected revenue will be influenced by factors such as footfall, menu pricing, and average customer spend.
  • To assess profitability, subtract all expenses (e.g., rent, salaries, raw materials, utilities, marketing) from the generated revenue.
  • Regularly review your financial statements, enabling you to monitor profitability and identify areas requiring optimization.

Please note that initiating a café business demands dedication, hard work, and continuous learning. Adherence to legal requirements is crucial, and crafting a unique value proposition is essential to attract customers. We wish you success as you embark on your café venture in India.

Disclaimer: The information provided above is intended for general guidance and should not substitute legal or financial advice. For specific queries, it is advisable to consult with qualified professionals to ensure compliance with local regulations and tailor the process to your unique circumstances.

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Step-by-Step Tutorial: MSME Registration on Udhyam Registration Portal in India

Posted on by Fastlegal Team

In India, MSME (Micro, Small, and Medium Enterprises) registration is crucial for businesses to avail of various benefits provided by the government. The Udhyam Registration Portal is an online platform that simplifies MSME registration. This step-by-step tutorial will guide you through the process of MSME registration on the Udhyam portal.

Step 1: Access the Udhyam Registration Portal

Visit the official website of the Udhyam Registration Portal by typing the URL https://www.udhyamregistration.gov.in into your browser’s address bar. Once the website loads, proceed to the next step.

Step 2: Create a New Account

On the Udhyam Registration Portal’s homepage, click on the “New User? Register here” button. Enter the necessary details such as your name, email address, mobile number, and password. After filling in the required information, click on the “Register” button to create your account.

Step 3: Verify Your Mobile Number and Email Address

After registering, you will receive a verification link on your email address and an OTP (One-Time Password) on your registered mobile number. Verify both your email address and mobile number by clicking the verification link and entering the OTP respectively.

Step 4: Provide Business Information

Once your account is verified, log in to the Udhyam Registration Portal using your registered email address and password. On the dashboard, click on the “MSME Registration” tab. Fill in the necessary details about your business, such as the name, type, PAN (Permanent Account Number), location, and contact information.

Step 5: Enter Bank Details and Business Activity

After providing your business information, proceed to enter your bank details, including account number and IFSC code. Additionally, specify the main economic activity of your enterprise by selecting the appropriate NIC (National Industrial Classification) Code.

Step 6: Upload Documents

To complete the MSME registration process, you need to upload certain documents. This includes your Aadhaar Card (for Indian citizens)/ Passport (for foreign citizens) as proof of identity, and PAN Card of the business owner. Make sure to have these documents ready in the required format (PDF/JPEG).

Step 7: Submit Your Application

Double-check all the information you have provided, ensuring its accuracy. Once you are confident that everything is correct, click on the “Submit” button to send your MSME registration application.

Step 8: Download the Certificate

After the submission, you will receive an acknowledgement number. Keep this number safe for future reference. The concerned authorities will review your application, and upon approval, you will be able to download your MSME registration certificate from the Udhyam Registration Portal.

Benefits of MSME Registration in India

Now that you have completed the MSME registration process, it’s important to understand the benefits it brings. Here are some advantages of MSME registration in India:

  1. Access to Government Schemes: MSME registration allows businesses to participate in various government schemes, such as loans at lower interest rates, subsidies, and grants.
  2. Credit Facilities: Banks and financial institutions provide easier access to credit for MSMEs, thanks to government initiatives like the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).
  3. Tax Benefits: MSMEs can avail of multiple tax benefits and rebates offered by the government, including exemptions under the Goods and Services Tax (GST) regime.
  4. Business Promotion and Support: Registered MSMEs receive support in the form of assistance for training, market access, technology upgrades, and more. Government initiatives help promote and market MSME products and services.
  5. Protection against Delayed Payments: The MSME Development Act safeguards businesses by ensuring faster resolution of disputes regarding delayed payments from buyers, thereby improving cash flow.
  6. Enhanced Credibility: MSME registration enhances the credibility of a business, especially when dealing with various stakeholders, including suppliers, customers, and financial institutions.

Remember, maintaining accurate and up-to-date information is crucial for availing these benefits. Regularly update your MSME registration details on the Udhyam Registration Portal as your business evolves.

Congratulations on completing the tutorial and understanding the benefits of MSME registration in India.

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How to Submit ECB Return in India

Posted on by Fastlegal Team

External Commercial Borrowings (ECB) are loans raised by Indian Companies from Foreign Banks or Foreign Body Corporates by Indian Companies, these loans are mainly raised in foreign Currency. Loans Raised by Indian Companies from Foreign Body Corporates or Banks are governed under ECB Framework of Reserve Bank of India and Required Returns are required to be submitted to AD-Bank in India, AD Bank Thereafter send the returns to DSIM

As per the ECB guidelines of the Reserve Bank of India, ECB Returns are required to submit to AD Bank within 7 days of the close of the Monthly.

ECB RETURN
ECB RETURN

Time Limit for Submission of ECB-2 Return

Within 7 Days of the close of the Month, say ECB-2 return for the Month of June 21 should be Submitted by 7th of July 21

Late Submission of ECB-2 Return

Entities that have not filed the ECB Return to AD Bank may also submit ECB Return after the due date with payment of the Late Submission Fee(LSF)

Late Submission Fee For ECB-2 Return

Sr. No.Type of ReturnPeriod of DelayApplicable Late Submission Fee
1.Form ECB 2Up to 30 calendar days from the due date of submissionINR 5,000
2.Form ECB 2Up to three years from the due date of submissionINR 50,000 per year
3.Form ECB 2Beyond three years from the due date of submissionINR 100,000 per year

What is ECB-2 Form

ECB-2 is prescribed form under ECB guidelines under which ECB Return is required to be submitted to RBI

How to Submit ECB Return

ECB Return is required to be submitted Physically to AD Bank Branch designated by AD Bank , you can ask your AD Bank the branch where you need to submit the return and submit accordingly and also you can email the soft copy of return within due date to desigmated officer of AD bank.

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New Norms For Direct Selling Companies In India

Posted on by Jitendra Sharma

To regulate the working of Direct Selling Companies the Union government has notified Consumer Protection Rules & asked direct selling companies to comply with them

  • It’ll be applicable to all goods, services bought or sold through direct selling as per new norms
  • All direct selling companies, sellers are prohibited from promoting pyramid schemes under new norms

The Union government has notified the Consumer Protection Rules, 2021, and asked the direct selling companies to comply with these rules within 90 days.

According to the new rules of the Ministry of Consumer Affairs, Food and Public Distribution, it will be applicable to all goods and services bought or sold through direct selling, all direct selling companies offering goods and services to consumers in India, including a direct selling entity, which is not established in India, but offers goods or services to consumers.

Under the new norms, all the direct selling companies and sellers are prohibited from promoting a pyramid scheme or enrolling any person in such scheme or participating in such arrangement in any manner whatsoever in the garb of doing direct selling business or participating in money circulation scheme in the garb of doing direct selling business.

The new rules direct the state governments to set up a mechanism to monitor and supervise the activities of direct sellers and direct selling entities while it makes a mandatory obligation for direct selling entities such as incorporation under the Companies Act, 2013, or if a partnership firm is registered under the Partnership Act, 1932, or if a limited liability partnership is registered under the Limited Liability Partnership Act, 2008.

The entities have a minimum one physical location as its registered office within India

It is also now mandatory to have a minimum of one physical location as its registered office within India and the companies to make a self-declaration that a direct selling entity has complied with the provisions of the direct selling rules.

Government notifies consumer protection rules, direct selling firms, latest national news updates, C

The entities must have a prior written contract with its direct sellers in order to authorise them to sell :

  • The entities must have a prior written contract with its direct sellers in order to authorise them to sell or offer to sell its goods or services, and the terms of such agreement will be just, fair and equitable, ensure that all its direct sellers have verified identities and physical addresses, issue identity cards and documents only to such direct sellers and also be liable for the grievances arising out of the sale of goods or services by its direct sellers.

Every direct selling entity must establish a mechanism for filing of complaints by consumers :

  • Every direct selling entity must establish a mechanism for filing of complaints by consumers through its offices or branches or direct sellers, either in person or through post, telephone, e-mail or website whereas all direct selling entities must maintain a record of all its direct sellers, including their identity proof, address proof, e-mail and other such information.

Every direct selling entity provides information regarding any direct seller on the request in writing made by a consumer after the purchase :

  • Every direct selling entity on the request in writing made by a consumer after the purchase of any goods or services, provide him with the information regarding any direct seller from whom such consumer has made a purchase, and such information must include the name, address, e-mail, contact number and any other information which is necessary for making communication with such direct seller for effective dispute resolution.

Advertisements consistent with the actual characteristics:

  • The new rules also specified that every direct selling entity must ensure that the advertisements for marketing of goods or services are consistent with the actual characteristics, access and usage conditions of such goods or services while no direct selling entity should directly or indirectly, falsely represent itself as a consumer and post reviews about its goods or services or misrepresent the quality or features of any of its goods or services.

Direct selling entity must maintain a record of all direct sellers :

  • Every direct selling entity must maintain a record of relevant information allowing for the identification of all direct sellers who have been delisted by the direct selling entity and such list must be publicly shared on its website and all direct selling entity must become a partner in the convergence process of the national consumer helpline of the Central government, the new norms added.

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How to File Appeal Against Rejection of GST Registration

Posted on by Fastlegal Team

In this article, we will discuss the main requirement for filing for appeal against the Rejection of GST Registration, GST Amendment, Cancellation of Registration, etc., Any GST taxpayer may file an appeal if he is not satisfied with the order passed by the designated officer. Appeal for an order against registration application is required to be filed in Form GST APL-01

Appeal Against Rejection of GST Registration

Which type of Registration Rejection orders for which appeal can be filed

  • Order of Rejection of Application for Registration for all Taxpayers
  • Order of Rejection of Application for Amendment for all Taxpayers
  • Order of Rejection of Application for Cancellation for all Taxpayers
  • Order of Rejection of Application for Revocation of Cancellation
  • Order for rejection of reply to show cause notice issued in Form GST CMP-05
  • Order for Cancellation of Registration
  • Order of Cancellation of Registration as Tax Deductor at source or Tax Collector at source
  • Order for cancellation of provisional registration
  • Order of rejection of enrolment as GST Practitioner

Form in which appeal is required to be filed for GST Registration Rejection

Form GST APL -01 is required to be filed online and The appellant is required to submit a physical copy of supporting documents along with the appeal application, duly signed and verified to the office of the appellate authority within 7 days of filing an appeal on the GST Portal. Upon receipt of complete documents, the final acknowledgment will be issued to him.

Time Period in which Appeal Against Rejection of GST Registration Can be filed with Appealte Authority

Any taxpayer or an unregistered person aggrieved by any decision or order passed against him (with respect to Registration, amendment or cancellation etc.) by an adjudicating authority, may appeal to the Appellate Authority, within three months from the date on which the said decision or order is communicated to such person.

The appellate authority may condone delay for a period of a maximum of 1 month if he is satisfied that the taxpayer was prevented by sufficient cause from presenting the appeal within the aforesaid period of three months and allow it to be presented within a further period of one month.

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Step-by-Step Procedure to Open a Bank Account for an LLP in India

Posted on by Fastlegal Team

In this Article we will discuss Step-by-Step Procedure to Open a Bank Account for an LLP in India, The concept of a Limited Liability Partnership (LLP). An LLP is a corporate business vehicle that provides the flexibility of a partnership and the benefits of limited liability for a company at a low compliance cost.

Prepare Necessary Documents:

Gather all required documents to open a bank account for an LLP in India. The documents include:

  • A copy of the LLP agreement.
  • A copy of the LLP’s incorporation certificate.
  • A list of all the partners, along with their identification and address proof.
  • A copy of the resolution to open a bank account, stating who is authorized to operate the account on behalf of the LLP. Note: All these documents need to be certified by a designated partner.

Choose a Suitable Bank:

Based on your LLP’s needs, choose a bank that fits best. Consider factors like services offered, fees, ease of access, and customer service.

Arrange a Meeting with Bank Officials:

Once you have chosen a bank, schedule a meeting with the bank officials. You could do this by visiting the branch or contacting them through their customer service.

Submit Documents and Application:

During the meeting, submit all the necessary documents, a duly filled application form, and the initial deposit amount. Make sure to check the application form for any errors or missing information.

Verification of Documents:

The bank officials will verify the documents. This process might take some time, depending on the bank’s procedures.

Opening of the Account:

If everything is in order and the documents are verified, the bank will proceed to open the account. They will provide you with the account details, cheque book, and other relevant information.

Remember, opening a bank account for an LLP in India may seem like a lengthy process, but with the right information and preparation, it can be quite straightforward. A bank account is crucial for managing the financial transactions of your LLP, so take the necessary time and steps to open one correctly.

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CIRP (Corporate Insolvency Resolution Process) under IBC

Posted on by Fastlegal Team

Corporate Insolvency Resolution Process is the first stage under corporate insolvency , Where any corporate debtor commits a default- 

  • a financial creditor,
  •  an operational creditor or
  •  the corporate debtor itself may initiate corporate insolvency resolution process in respect of such corporate debtor.

If the Corporate Insolvency Resolution Process is initiated against corporate debtor (Company or LLP) following process is followed: 

  • Declaration of Moratorium (Temporary Legal Stay) 
  • Appointment of Interim resolution professional (IRP)
  • Public announcement ( for Submission of Claims ) 

Management of affairs of Corporate debtor by Interim Resolution Professional : 

The date of appointment of Interim Resolution Professional following powers exercise by Interim resolution professional :

  • The Management affairs of the corporate debtor is vested with resolution professional and the powers of the board of directors or  partners of the corporate Debtor gets suspended and vested and exercised by the resolution professional
  • Reporting by officers and managers of the corporate debtor to the interim resolution professional and provision of access to such documents and records of the corporate debtor as may be required by the interim resolution professional 
  • The financial institution who is Managing the accounts of the Corporate debtor shall act on the instructions of the interim resolution professional in relation to such accounts and furnish all information relating to the corporate data available with them to interim Resolution resolution professional
  • Resolution professional shall act and execute in the name and on behalf of the corporate debtor all deeds, receipts  and other documents if any
  • Resolution professional have the authority to access the electronic records of the Corporate Debtor  from information utility having financial information of the corporate debtor
  • Resolution professional have the authority to access books of accounts records and other relevant documents of the Corporate Debtor  available with a government authority statutory auditors, Accountants and such other persons as may be specified and be responsible for complying with the requirements and any law for the time being in force on behalf of corporate debtor

 

So if the company goes into the CIRP process all the above powers are vested with the resolution professional 

 

Resolution professional while making every endeavour to protect and preserve the value of property of the corporate Debtor and manage the operations of the corporate debtor as a Going Concern basis: 

  • Appoint accountants, legal, and other professional as may be necessary
  • to enter into contracts on behalf of corporate debtor, and modify the transication and contracts entered before the commencement of CIRP  
  • To raise Interim Finance 

Constitution of committee of creditors (COC) :

Committee of creditors by interim resolution professional mandatory required to be constituted after collection of all the claims received against the corporate debtor and determination of the financial position of the corporator

 

Committee of creditors shall compromise all the financial creditors to the corporate debtor  and where the corporate debtor owes Financial Debts to two or more Financial Creditors as part of Consortium or an agreement, each such financial creditor shall be part of the committee of creditors and their voting shares and determine on the basis of financial debts owed to them

Appointment of Resolution Professional : 

The first meeting of the committee of creditors shall be held within 7 days from the date of constitution of the committee of creditors and the committee of creditors may in the first meeting by majority of the not less than 66% of the voting shares of the financial creditors, either resolve to appoint the interim resolution professional as a resolution professional to replace the resolution professional by another resolution professional.

 

Preparation of Information Memorandum : 

Information memorandum is prepared by the resolution professional to give an opportunity to any resolution applicant to submit resolution plan for Revival and reconstruction of Corporate debtor to avoid any future insolvency and liquidation situations.

Submission of Resolution plan : 

 

Resolution Applicant will submit the resolution plan to resolution professional, Resolution applicant shall be prepared on the basis of information memorandum and submitted along with an affidavit stating that he is eligible to submit resolution plan

Approval of Resolution Plan: 

Resolution Plan shall be binding on the corporate debtor and its employees, members, creditors, guarantors and other stakeholders involved in the resolution.