How To Initiate IBC Procedings?
As per the Insolvency and Bankruptcy Code, 2016 (IBC), the following person may initiate IBC
proceedings against corporate debtors where such corporate debtors have defaulted;
- Financial Creditors
- Operational Creditors
- Corporate debtor (itself)
Brief of initiation of Insolvency process;
A) '‘Financial Creditor’ – The following three requirements are necessary to file IBC
application u/s 7 of the IBC Act;
- The related debt or liability should be covered by the financial debt as defined in U/s
5(8) of IBC, i.e. any debt paid out against the consideration for the time value of
money, i.e. interest, and includes other debts as described in the above section, and
- There must be an default in discharge of the above said liability, and
- The sum total of whole default must be Rs. 100,000/-or more.
B) 'Operational Creditor' – The procedure for the operational creditor is somewhat
different. The operational creditor shall comply with the following requirements in order to
initiate the IBC proceeding;
- The related debt or liabilities will be covered under 'Operation Debt,' which is
specified as u/s 5(21) of IBC, i.e. all claims relating to the supply of
goods/service/employment or payable to the Government.
- There has been a default in the discharge of the above liability, and
- The number of these defaults should be Rs.100,000/-or more,
- Notice of request U/S 8 has been sent to the corporate debtor and
- Neither payment nor notice of dispute was issued within 10 days of the issuance with the
above-mentioned document.
C) 'Corporate Debtor' – In compliance with section 10 of the IBC, a corporate debtor
can also begin insolvency proceedings against him if the following requirements are met;
- The corporate debtor has undergone defaults, whether in terms of operating debt or
financial debt, or any other and
- The sum of this default will be Rs. 100,000/-or more.
FORMS, FEES, AND DOCUMENTS FOR IBC APPLICATION
Brief of particular form of required for initiating IBC are as follows:
Particulars |
Financial Creditor |
Operational Creditor |
Corporate Debtor |
Form for filing the application |
Form 1 |
Form 5 |
Form 6 |
Fees to be paid |
Rs. 25,000/- |
Rs. 2000/- |
Rs. 25,000/- |
Adjudicating Authority or court |
NCLT has jurisdiction of the State in which the registered office of the
corporate debtors is located. |
NCLT has jurisdiction of the State in which the registered office of the
corporate debtors is located. |
NCLT has jurisdiction of the State in which the registered office of the
corporate debtors is located. |
Notice of Demand |
N.A. |
Form 3 or 4 |
N.A. |
Consent of Insolvency professional |
Form 2 (compulsory |
Form 2 (optional) |
Form 2 (compulsory) |
Documents for application : |
Form – 1; Part 1 – Particular of applicant Part 2 – Particulars of
Corporate debtors Part 3 – Particulars of proposed IRP Part – 4
Particulars of financial debt Part–5 Documents /records/ evidence of default
Annexures – (i) Proof of fees paid, (ii) Proof of dispatch of application to
corporate debtor |
Form – 5; Part 1 – Particular of applicant Part 2 – Particulars of
Corporate debtors Part 3 – Particulars of proposed IRP Part – 4
Particulars of operational debt Part – 5 Documents/records/ evidence of
default Annexures – (i) Proof of fees paid, (ii) copy of demand notice (iii)
copy certificate or bank statement, (iv) affidavit of no- dispute |
Form – 6; Part 1 – Particular of corporate applicant Part 2 –
Particulars of proposed IRP Part – 3 Particulars of financial/operational
debt Documents/records/ default as prescribed |
About Rajput Jain & Associates
Our Insolvency Professional Team/department is well trained having in-depth Knowledge,
expertise and experience in the area of preliminary study, planning and filing of Insolvency
Application as per the provision of IBC2016. On the basis of circumstances, we are providing
dedicated & result-oriented solutions. We also have well experienced secretarial support in
the secretarial duties of the Resolution Professionals. We can also support the Resolution
Professionals though experienced Team of Insolvency professionals or department. These
programs shall provide the following:
- Issuing a public announcement in the media in compliance with the rules of the
Insolvency and Bankruptcy Board of India Regulations (Insolvency Resolution Process for
Corporate Persons), 2016.
- Preparation and creation of the agenda for the meeting of the Creditors' Committee. The
plan is prepared by our team of specialists in compliance with IBC 2016.
- Preparation, implementation and notice of the meeting by effective means. Our team shall
prepare a notice in accordance with the guidelines of the Insolvency and Bankruptcy
Board of India Regulations (Insolvency Resolution Process for Corporate Persons) 2016.
- Preparation and implementation of the minutes of the meeting;
- Shall prepare an action report based on decisions taken at previous meetings.
- Compilation of Information Memorandum as per the Insolvency and Bankruptcy Board of
India Regulations (Insolvency Resolution Process for Corporate Persons), 2016. 2016. The
Memorandum of Information shall contain the financial details of the Corporate Debtor.
- Communications with banks and regulatory bodies surrounding the start of corporate
insolvency. Our department maintains that IBC 2016 is completely compliant.
- We also have additional assistance, such as organising Two Registered valuer appointment
for the valuation of assets of corporate debtors, security services for the security of
the physical assets of the Corporate Debtor and E-voting / IT assistance.
We have highly trained insolvency practitioners who are well trained in insolvency law and
having fair expertise in dealing with such cases.
For more information, please email us at singh@carajput.comor call our expert at 9555555480