Insolvency and Bankruptcy Code, 2016: Difference between revisions
WikiSysopIG (talk | contribs) No edit summary |
WikiSysopIG (talk | contribs) |
||
| (One intermediate revision by the same user not shown) | |||
| Line 1: | Line 1: | ||
'''[[Insolvency and Bankruptcy Code, 2016]]''' ('''IBC''') is an Indian law that provides a legal framework for the reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. The Code seeks to maximize the value of assets, promote entrepreneurship and availability of credit, and balance the interests of stakeholders. It also established the [[Insolvency and Bankruptcy Board of India]] (IBBI). | '''[[Insolvency and Bankruptcy Code, 2016]]''' ('''IBC''') is an Indian law that provides a legal framework for the reorganisation and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. The Code seeks to maximize the value of assets, promote entrepreneurship and availability of credit, and balance the interests of stakeholders. It also established the [[Insolvency and Bankruptcy Board of India]] (IBBI). | ||
The Code was enacted as Act No. 31 of 2016 on 28 May 2016. It extends to the whole of India, with its provisions brought into force in stages through government notifications. | The Code was enacted as Act No. 31 of 2016 on 28 May 2016. It extends to the whole of India, with its provisions brought into force in stages through government notifications. | ||
==Objectives== | ==Objectives== | ||
| Line 15: | Line 15: | ||
* providing mechanisms for corporate liquidation and individual bankruptcy. | * providing mechanisms for corporate liquidation and individual bankruptcy. | ||
These objectives are reflected in the long title of the Code. | These objectives are reflected in the long title of the Code. | ||
==Scope== | ==Scope== | ||
| Line 33: | Line 33: | ||
* related offences and penalties. | * related offences and penalties. | ||
The Code is divided into five Parts covering these areas. | The Code is divided into five Parts covering these areas. | ||
==Corporate insolvency resolution process== | ==Corporate insolvency resolution process== | ||
| Line 45: | Line 45: | ||
* corporate applicants. | * corporate applicants. | ||
The Code contains separate provisions governing initiation by financial creditors, operational creditors, and corporate applicants. | The Code contains separate provisions governing initiation by financial creditors, operational creditors, and corporate applicants. | ||
==Financial creditor== | ==Financial creditor== | ||
| Line 94: | Line 94: | ||
During CIRP, the resolution professional performs functions prescribed by the Code and applicable regulations, including managing the process, collecting information and claims, and facilitating consideration of resolution plans. | During CIRP, the resolution professional performs functions prescribed by the Code and applicable regulations, including managing the process, collecting information and claims, and facilitating consideration of resolution plans. | ||
The IBBI regulates insolvency professionals and related institutions. | The IBBI regulates insolvency professionals and related institutions. | ||
==Resolution plan== | ==Resolution plan== | ||
| Line 138: | Line 138: | ||
The framework is intended to provide a structured insolvency-resolution mechanism that can operate with greater involvement of the existing management, subject to the safeguards and requirements established by the Code. | The framework is intended to provide a structured insolvency-resolution mechanism that can operate with greater involvement of the existing management, subject to the safeguards and requirements established by the Code. | ||
The pre-packaged process is separately provided for in Part II of the Code. | The pre-packaged process is separately provided for in Part II of the Code. | ||
==Fast-track corporate insolvency resolution== | ==Fast-track corporate insolvency resolution== | ||
| Line 165: | Line 165: | ||
* offences and penalties. | * offences and penalties. | ||
The Code also contains provisions specifically relating to personal guarantors to corporate debtors. | The Code also contains provisions specifically relating to personal guarantors to corporate debtors. | ||
==Insolvency and Bankruptcy Board of India== | ==Insolvency and Bankruptcy Board of India== | ||
| Line 178: | Line 178: | ||
* information utilities. | * information utilities. | ||
It also regulates and oversees insolvency-related processes under the Code. | It also regulates and oversees insolvency-related processes under the Code. | ||
==Insolvency professionals== | ==Insolvency professionals== | ||
| Line 190: | Line 190: | ||
'''Information utilities''' are institutions established within the IBC framework to collect, authenticate, and provide financial information relevant to insolvency proceedings. | '''Information utilities''' are institutions established within the IBC framework to collect, authenticate, and provide financial information relevant to insolvency proceedings. | ||
Information utilities are regulated by the IBBI. | Information utilities are regulated by the IBBI. | ||
==Adjudicating authorities== | ==Adjudicating authorities== | ||
| Line 223: | Line 223: | ||
* inspection and investigation. | * inspection and investigation. | ||
The regulatory framework is periodically amended. The IBBI's current materials show regulations amended through 2026. | The regulatory framework is periodically amended. The IBBI's current materials show regulations amended through 2026. | ||
==Amendments== | ==Amendments== | ||
| Line 239: | Line 239: | ||
* institutional and regulatory matters. | * institutional and regulatory matters. | ||
The IBBI's legal-framework records include the Insolvency and Bankruptcy Code (Amendment) Act, 2026, as well as earlier amendments. | The IBBI's legal-framework records include the Insolvency and Bankruptcy Code (Amendment) Act, 2026, as well as earlier amendments. | ||
==Importance== | ==Importance== | ||
The Insolvency and Bankruptcy Code, 2016 established a consolidated legal framework for insolvency resolution and bankruptcy in India. It replaced a fragmented framework with processes covering corporate insolvency resolution, liquidation, individual insolvency, bankruptcy, insolvency professionals, and information utilities. The Code is intended to facilitate time-bound resolution, maximize asset value, promote credit availability and entrepreneurship, and balance stakeholder interests. | The Insolvency and Bankruptcy Code, 2016 established a consolidated legal framework for insolvency resolution and bankruptcy in India. It replaced a fragmented framework with processes covering corporate insolvency resolution, liquidation, individual insolvency, bankruptcy, insolvency professionals, and information utilities. The Code is intended to facilitate time-bound resolution, maximize asset value, promote credit availability and entrepreneurship, and balance stakeholder interests. | ||
==See also== | ==See also== | ||