With the widespread impact of COVID-19 on the economies worldwide, it was feared that many small and medium size enterprises would be driven to insolvency. With economic activities stymied and no money feeding in the system, bankruptcy was a plausible scenario that many SMEs were staring at.
With the effective implementation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code 2016, we could see several cases getting resolved, thus helping revival of businesses. But the onslaught of COVID- 19 also affected the insolvency regime in India. The prime objective of the Regulators became to rescue the viable firms at this time of pandemic. A slew of relief measures was introduced in the insolvency resolution process in the country due to the outbreak of COVID- 19 pandemic by the Government of India and by the Regulators. The extension of Limitation and increasing the minimum threshold to trigger insolvency to INR 1 crore from INR 1 lakh were some of the major measures which were initiated. In April 2020, The Insolvency and Bankruptcy Board of India (Liquidation Process) (Second Amendment) Regulations, 2020 notified to exclude period of lockdown for computation of timeline in liquidation process. With a host of several such measures the Government has tried to support companies.
Insolvency information management
However, insolvency and bankruptcy remain a reality and there are certain liabilities when it comes to retention of documents. An insolvent organisation must maintain their business records for a period of ten years from the date of cessation of transactions and business. These documents which are of critical nature may include business correspondence, reports, journals, contracts, employee files, annual financial statements, corporate tax records, patents, contracts, agreements, trademark records, bank and legal records etc.
There are certain set rules and regulations when managing business records of an insolvent organisation. In the event of an organisation going insolvent, an insolvency practitioner is appointed who then takes over the asset and controls the critical business records to run the liquidation process. Often the challenge for insolvency practitioners is to search for relevant and critical documents from largely unorganized corporate information corpus spread over multiple locations. Information management plays a crucial role in the liquidation process. Businesses can run the risk of fraud and sabotage due poor storage and data retention protocols during these trying times of their existence. As insolvent organizations are required to store business records for a duration of ten years, it hardly makes any business sense to deploy document management onsite. An onsite document management option would be ineffective on cost parameters and will not ensure the flexibility, security and cost efficiency of an offsite storage solution which a professional records management company shall offer.
Vault storage is the best bet
Secure document vaults storage provide the highest levels of security and protection for your vital documents.
Our secure vaults are our premium storage solution. Ideally suited for critical documents like contracts, deeds and certificates, as well as back-up computer media. These are housed in our state of the art, purpose-built facilities with 24/7 security, surveillance and unrivalled protection from the elements.
Our vaults go further than that though, offering comprehensive, cutting-edge technology to keep important information secure and in good condition.
Managing your stored documents
Getting visibility on your stored records is even critical when you may no longer operate from a location where your records are physically stored. It’s in situations like these that digitally accessing and managing your records assumes significance. Our electronic document management system can scan, digitize and store these records for you to access these securely from a remote location. This technology means you only need one central repository for all your important data, from where it is accessible, manageable and fully auditable.
To know more about our services and how we can assist you in managing your corporate information, enquire now or call +91 8080 322 322 to speak to one of our consultants.