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Facts About the Insolvency And Bankruptcy Code,2016

byPwycompetitor

An Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner.

INSOLVENCY- Insolvency is a situation where individuals or companies are unable to repay their outstanding debt.

ENACTED IN - 2016

INTRODUCED BY- Arun jaitley

PROVISIONS OF THE CODE APPLICABLE FOR :-

  • Any company incorporated under the companies Act,2013.
  • Any other company governed by any special Act for the time being in force.
  • Any limited liability incorporated under the limited liability partnership act,2008.
  • Partnership firms and individuals.
OBJECTIVES OF IBC
  • To consolidate and amend all existing insolvency laws in India.
  • To simplify and expedite the insolvency and bankruptcy proceedings in India.
  • To protect the interest of creditors including stakeholders in a company.
  • To revive The company in a time-bound manner.
  • to promote entrepreneurship.
  • To get the necessary relief to the creditors and consequently increase the credit supply in the economy.
  • Two work out a new and timely recovery procedure to be adopted by the banks, financial institutions or individuals.
  • To setup an insolvency and bankruptcy board of India.
  • Maximization of the value of assets of corporate persons.
SOME FEATURES OF IBC
  • The insolvency and bankruptcy board subject to the general direction of the central government, perform all the function.
  • The insolvency and bankruptcy board  register insolvency professional agencies, insolvency professionals and information utilities and renew, withdraw, suspend or cancel such registrations.
  • INSOLVENCY PROFESSIONAL AGENCIES-  An insolvency professional agency perform many function such as grant membership to persons, monitor the performance of its members, suspend or cancel the membership etc.
  • INSOLVENCY PROFESSIONAL - The function of an insolvency professional to take such actions as may necessary in the matters of  such as a fresh order process, individual and corporate insolvency resolution process etc.
  • INFORMATION UTILITIES- Its collect the financial information to be used in insolvency, liquidation and bankruptcy proceedings.
  • ADJUDICATING AUTHORITIES:-The National Companies Law Tribunal, The debt recovery tribunals.
AMENDMENT RELATED TO THE IBC:-
  • The Insolvency and Bankruptcy Code(amendment)ordinance,2018:-
        • the ordinance amends the insolvency and bankruptcy code,2016 to clarify that allottees under a real estate project should be treated as financial creditors.
        • the voting threshold for routine decisions taken by the committee of creditors has been reduced from 75% to 51%.
        • the ordinance allows the withdrawal of a resolution application submitted to the NCLT under the code. this decision can be taken with the approval of 90% of the committee of creditors.
  • The Insolvency and Bankruptcy Code(amendment)bill,2019:-  the codes provides a time-bound process for resolving insolvency in companies and among individuals.
  • The Insolvency and Bankruptcy Code(second amendment)bill,2020:-  the bill seeks to temporarily suspend initiation of the corporate insolvency resolution process under the code.
  • The Insolvency and Bankruptcy Code(amendment)ordinance,2021:-
    • the code provides a time bound process for resolving the insolvency of corporate debtors(within 330 days) called the corporate insolvency resolution process(CIRP).
    • The ordinance introduces an alternate insolvency resolution process for MSME called pre packaged insolvency resolution process.
    • the central government may increase the threshold of minimum default amount up to one crore rupees through ordinance.
    •  for applying for PIRP, the debtor needs to obtain approval of at least 66% of its financial creditors who are not related parties of the debtor.




 

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