With Covid-19 Pandemic widespread coupled with lockdown and economic shutdown, insolvency in many of the small and medium enterprises was feared. With no money feeding in the systems, bankruptcy one or another was the near end for many of them until the Government of India brought in a relief package for all these organizations. On 24 March 2020, the government announced the initiation of Corporate Insolvency Resolution Process (‘CIRP’) under the Insolvency and Bankruptcy Code (‘IBC’) against the erring companies was increased from Rupees 1 lakh to Rupees 1 Crore, vide MCA Notification No. S.O.1205(E).
The increase in the threshold amount was meant to benefit the small companies and MSMEs (medium, small and micro enterprises) struggling for cash inflow during the COVID-19 lockdown. This action of the Indian government will work in favor of these businesses facing the threat of default and avoid a large scale of insolvencies.
There are certain advantages to vault storage for insolvency documents and records. As per the rules and regulations an insolvent organization needs to preserve the documents for a fixed period of 10 years. You can read the brief on benefits vault on storage here.
One of the hardest drawbacks of the Covid-19 pandemic has been the increase in insolvency demand practitioners to manage the increasing number of insolvent businesses. If an organization goes insolvent, a legal obligation forces them to retain and preserve the important data and records for atleast 8-10 years depending on the business.
There is a set of legal rules to follow around the retention of business records following the insolvency of a company. In the event of a business going insolvent, an insolvent practitioner is appointed and from thereon they are required to take over all the assets and other vital records to run the liquidation process. One of the biggest issues for insolvency practitioners is of storage spaces to manage and tore all the physical records of various liquidating organizations. Insolvency practitioners need to store some vital records for 10 years from the date it ceased to exist. Hence security & safe storage of documents is of paramount importance.
Despite the businesses worldwide going digital, many organizations still prefer to generate and store paper documents to prevent fraud, sabotage, ID thefts and there is a high percentage of that even in the age of digitization. This makes it important to store and preserve your vital data records and keeping them at office premises can be a huge risk. Record Management companies like us at Dox and Box provide solutions for secure storage and preservation.
Proper management and preservation of all the vital records of an organization are of prime importance and mismanagement in this regard can lead to serious fallouts. If an organization becomes insolvent, it is a huge challenge for insolvency practitioners to avoid time wastage & track down every single piece of information and document needed for their work. Mismanagement of records and documents over the years can hamper and slow down the process of insolvency practitioners along with accessing information across multiple sites. Document management and data archiving are a very big part of the insolvency procedure. The risks of fraud and sabotage involved with poor storage and management of business documents are huge and it is best to outsource this task to professional organizations.
Once an organization goes bankrupt or insolvent, there is no sense in paying money just for physical onsite records and data storage and that too when it is mandatorily required for a period of about 10 years
The high volume of physical records and other vital data can very quickly consume any space you have to offer and you end up paying a high premium in business rent and rates. Many times the rent for valuable business premises is higher than what you pay to a records management organization for their storage and preservation services. By using offsite, secure storage facilities at Dox and Box, you save money and also eliminate the risks of the data breach and other incidents of possible sabotage. We take complete accountability of our work and facilities along with providing categorized records access and instant retrieval
Safety, security, and proper preservation of your important documents are of prime importance in the event of an organization going insolvent. Dox and Box have the best and state of the art highly secured off-site record management facilities.
Our solutions are cost effective to help you manage all sorts of files and data with quick and easy retrieval, along with compliance with all rules and regulations under the current Data Protection Act. Once the mandatory period of document preservation is over, it is required that all the records and data be securely destructed. We have in place the best in class shredding technology which is eco-friendly and ensures that none of the records and data is irreversible once they have been through to our secure document destruction.
Management of documents is equally important as storage and preservation. At Dox and Box, we not only store your documents but help you manage them digitally with the help of electronic document management software. We provide you with highly secure and efficient methods of document and records management so that you can keep live track of everything related to them. An organization needs to have an instant access to their documents and always be in light with their storage and management to avoid any kind of data breaches, which is what makes it important to use professional services for records management and document digitization.