FAQ on Insolvency and Bankruptcy Code 2016

The Insolvency and Bankruptcy Code, 2016, is a law that provides a time-bound process for resolving insolvency in companies and among individuals. It aims to maximize the value of assets, promote entrepreneurship, and ensure the availability of credit.

A corporate applicant is a corporate debtor, a corporate debtor's partner or member who is permitted to initiate the corporate insolvency resolution process or a person in charge of and/or responsible for the corporate debtor's financial affairs.

The Insolvency and Bankruptcy Code (Amendment) Bill, 2019, is a bill that amends the Insolvency and Bankruptcy Code, 2016. It introduces several changes, such as clarifying the eligibility of resolution applicants, setting a deadline After the corporate insolvency resolution process is over, and giving more rights to the committee of creditors.

A: A financial creditor is any individual who owes money, including someone to whom the debt has been transferred or legally assigned. A financial debt is a loan that is paid back with interest to account for the time value of money.

Section 9 of the Insolvency and Bankruptcy Code, 2016 is a provision that allows an operational creditor to initiate the corporate insolvency resolution process against a corporate debtor if the debtor has committed default of at least one lakh rupees. The operational creditor has to first deliver a demand notice to the debtor and give him ten days to repay the debt or bring a dispute to notice.

Section 14 of the Insolvency and Bankruptcy Code, 2016, is a provision that declares the start of the corporate insolvency resolution process is suspended. The moratorium prohibits the institution or continuation of any suits or proceedings against the corporate debtor, the transfer or disposal of any assets of the debtor, the enforcement of any security interest, and the recovery of any property by an owner or lessor.

Section 8 of the Insolvency and Bankruptcy Code, 2016, is a provision that requires an operational creditor to deliver a demand notice to the corporate debtor if the debtor has committed a default of at least one lakh rupees. The demand notice should specify the amount and details of the debt and the invoice or other relevant documents. The debtor has to reply within ten days, either admitting or denying the debt or bringing a dispute to notice.