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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.
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.
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