What does Insolvency and Bankruptcy Code, 2016 do?
By Team Legistify / 2016-06-11
The Insolvency and Bankruptcy Code is a welcome overhaul of the existing framework dealing with the insolvency of corporates, individuals, partnerships and other entities. It paves the way for much-needed reforms while focussing on creditor driven insolvency resolution.

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On 28 May 2016, the Insolvency and Bankruptcy Code 2016 (IBC) received Presidential assent in India and was published in the Official Gazette. The Government of India has notified several sections of the IBC for commencement since then.

On 1 December 2016, the sections of the IBC related to the resolution of corporate insolvency and corresponding regulations made by the Insolvency and Bankruptcy Board of India (the Board) became operational. While several critical provisions of the IBC (including those on liquidation) are yet to be notified, the IBC signals a radical change in how future reorganisations and formal liquidation will be conducted in India.

Insolvency and Bankruptcy Recent Reports

Recent press reports indicate that there are over 75,000 cases pending in debt recovery tribunals across the country. This number does not even take into account the other cases pending before the Board for Industrial and Financial Reconstruction under the Sick Industrial Companies (Special Provisions) Act 1985 or those pending before various High Courts or the National Company Law Tribunal.

Main aims of the new law

The Insolvency and Bankruptcy Code is a welcome overhaul of the existing framework dealing with the insolvency of corporates, individuals, partnerships and other entities. It paves the way for much-needed reforms while focussing on creditor driven insolvency resolution.

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Get connected to the Best Lawyers and Chartered Accountants Near You!


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