Categories: IBC

Highlights in insolvency and bankruptcy code, 2016

  • The Insolvency and Bankruptcy 2015 was brought in Lok Sabha on 21st December 2015 and was appeal to Joint Committee.
  • The report was shown in Lok Sabha and Rajya Sabha on 28th April 2016. This code has been passed by Lok Sabha on 5th May 2016 and by Rajya Sabha on 11th May 2016.

IBC Codes :-

For revise the laws related to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner for maximization of value of assets of such persons for advertising entrepreneurship, availability of credit and balance the interest of all the stakeholders including alteration in the priority of payment of Government dues and to establish an Insolvency and Bankruptcy Fund and for matters connected therewith.

  • Codes cover the Insolvency of individuals, unlimited liability partnerships, Limited Liability partnerships and companies.
  • The Insolvency Resolution Process for individuals and unlimited liability partnerships varies from the one for companies and LLPs.
  • The Debt Recovery Tribunal should be the Adjudicating Authority with jurisdiction over individuals and unlimited liability partnership firms.
  • The Appeals from the order of DRT should be taken in Debt Recovery Appellate Tribunal. The National Company Law Tribunal shall be the Adjudicating Authority with jurisdiction over companies & LLPs.
  • The appeal from the Order of NCLT should be taken in National Company Law Appellate Tribunal.
  • Codes aims to abolished of the presidency towns insolvency act 1909 and provincial insolvency act 1920.

CODES AIM TO REVISE THE FOLLOWING ELEVEN LAWS:-

The codes come up with an insolvency regulator to keep monitoring over:-

  • Insolvency Professionals (IP)
  • Insolvency Professionals Agencies (IPA)
  • Information Utilities (IU)

 The Insolvency and Bankruptcy Board of India will guide these agencies to develop professional standards, codes of ethics and exercise a disciplinary check on faulty members for development of a competitive industry for insolvency professionals.

The codes offer information utilities which would gather, collect, attest and broadcast financial information from listed companies and financial as well as operational creditor’s information from companies.

An individual insolvency database is also introduced to be set up with the goal of giving information on insolvency status of individuals.

The Code proposes a fast process and timeline of 180 days is set for dealing with applications for corporate insolvency resolution.

This can be extended for 90 days by the Adjudicating Authority only in some exceptional cases. During insolvency resolution period ( 180/270 days), the management of the debtor is placed in the hands of an  resolution professional.

An insolvency resolution plan made by the resolution professional has to be accepted by at least 75% of voting share of the financial creditors.

Plan will need sanction of the Adjudicating Authority. If plan is rejected, the Adjudicating Authority will make an order for the liquidation.

The code offer a fast track insolvency resolution process for companies who have small operations. The process will have to be completed within 90 days that can be extended up to 45 days more if the 75% of the financial creditors agree with this extension.

 

Popular blog:-

CLOSURE OF SUBSIDIARY COMPANY

Compliance for Foreign Subsidiary Companies in India

 

 

Rajput Jain & Associates

Rajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders. Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields. We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.

Recent Posts

New cheque clearing process starting from Oct 4, 2025

New cheque clearing process in India starting from October 4, 2025 Existing System (Until Oct 3, 2025) : Clearing Method:… Read More

17 hours ago

Overview on Tax Treatment on Gratuity in India

Overview on Tax Treatment on Gratuity in India What is Gratuity? Gratuity is a lump sum paid by an employer… Read More

18 hours ago

Taxation Comparison: Gold Coin vs Gold Jewellery

Taxation Comparison: Gold Coin vs Gold Jewellery Tax Aspect Gold Coin Gold Jewellery ITR Reporting Treated as a capital asset.… Read More

4 days ago

Crypto Taxation & ITR Reporting Guide for India

Crypto Taxation & ITR Reporting Guide Tax on Profits from Crypto (Virtual Digital Assets)- Taxation U/s 115BBH Applicability on Virtual… Read More

4 days ago

Savings Account Rules for Transactions to Avoid Tax Scrutiny

Savings Account – Rules for Transactions to Avoid Income Tax Scrutiny The Income Tax Department monitors high-value transactions through banks’… Read More

4 days ago

Quick Guide on GST Marginal Scheme

Quick Guide on GST Marginal Scheme What is GST Marginal Scheme Meaning : The GST Margin Scheme is applicable primarily… Read More

4 days ago
Call Us Enquire Now