The Insolvency and Bankruptcy Code (IBC) is a comprehensive legal framework that governs the insolvency and bankruptcy process in India. The IBC was introduced in 2016 to provide a streamlined and efficient process for the resolution of insolvency cases. In this blog, we will explore the legal framework of the IBC and how it works.
The Insolvency and Bankruptcy Code (IBC) in India was enacted in 2016. The primary objective of creating a more effective mechanism for the resolution of corporate insolvency. The IBC provides a clear and streamlined process for the resolution of distressed assets. Which helps to reduce uncertainty and increase investor confidence in the credit market. In addition to this primary objective. The IBC has several other important objectives, which are discussed below.
Overall, the objectives of the IBC are to create a more effective mechanism for the resolution of corporate insolvency. Promote a culture of financial discipline, strengthen the credit market. Encourage entrepreneurship, and protect the interests of all stakeholders. The IBC has been successful in achieving these objectives, and has helped to create a more dynamic and vibrant business environment in India
The IBC provides a mechanism for the resolution of insolvency cases that involves. The appointment of an insolvency professional (IP). The IP is responsible for managing the affairs of the debtor and ensuring. The resolution process is carried out in a time-bound manner.The resolution process can be initiated by either the debtor or the creditor.
If the resolution process fails, the company goes into liquidation. In the liquidation process, the assets of the company are sold, and the proceeds are distributed among the creditors.
The National Company Law Tribunal (NCLT) is the adjudicating authority for insolvency cases under the IBC. The NCLT is responsible for hearing and disposing of applications filed under the IBC. The NCLT has the power to approve or reject resolution plans and decide on the distribution of assets in the liquidation process.
The IBC provides for the establishment of an Insolvency Professional Agency (IPA) to regulate the conduct of IPs. The IPA is responsible for setting standards for IPs and ensuring that they comply with the code of conduct. The IPA also has the power to take disciplinary action against IPs who violate the code of conduct.
The Insolvency and Bankruptcy Board of India (IBBI) is the regulatory body for insolvency and bankruptcy in India. The IBBI is responsible for overseeing the implementation of the IBC and regulating. The conduct of IPs and other stakeholders involved in the insolvency process.
The Insolvency and Bankruptcy Code is a comprehensive legal framework that governs. The insolvency and bankruptcy process in India. The IBC provides a time-bound and efficient process for. The resolution of insolvency cases and aims to balance the interests of all stakeholders. The NCLT is the adjudicating authority for insolvency cases, and the IPA and IBBI are responsible for regulating. The conduct of IPs and other stakeholders involved in the process. The IBC has helped to improve the ease of doing business in India and strengthen the credit market.