Basics of IBC,2016

INSOLVENCY AND BANKRUPTCY CODE, 2016

•  CODE : “Code” is usually known as a collection or compendium of laws. It refers to a systematic and comprehensive compilation of laws, rules or regulations that are consolidated and classified according to a particular subject matter.

• INSOLVENCY : Insolvency is the inability to pay debts when they are due. Fortunately, there are solutions for resolving insolvency, including borrowing money or increasing income so that you can pay off debt. Insolvency is a state of economic distress.

• BANKRUPTCY : Bankruptcy is usually a final alternative when other attempts to clear debt fail. Bankruptcy is a court order that decides how an insolvent debtor will deal with unpaid obligations.

•  LIQUIDATION : Liquidation is a process of winding up of a corporation or an incorporated entity. It may be Voluntary Liquidation or Compulsory Liquidation.

Structure of IBC, 2016

In entirety, the Code has 255 sections which are divided into 5 Parts as given below:

 •    Part I (Section 1 to 3)

    Preliminary (Definitions)

•     Part II (Section 4 to 77)

    Insolvency Resolution and Liquidation for Corporate Persons

•     Part III (Section 78 to 187)

    Insolvency Resolution and Bankruptcy for individuals and Partnership Firms

•     Part IV (Section 188 to 223)

    Regulation of Insolvency Professionals, Agencies and Information Utilities

•     Part V (Section 224 to 255)

    Miscellaneous (enables amendments in other statues such as Companies Act 2013)

Compiled by :

CA IP Mukesh Mittal

B.Com., FCA

Insolvency Professional

Independent Director

Certified Concurrent Auditor

9215536951, 9813340495

ca.mukeshmittal@gmail.com

https://camukeshmittal.blogspot.com

DISCLAIMER: The Author have taken utmost care while drafting the article but it may occur that certain error creeps in. This article is for academic purpose and should not be treated as a professional advice. The readers are advised to refer the Bare Acts and Rules before making any judgment.