Insolvency and Bankruptcy Code 2016 (IBC) got introduced on 5th and 19th August 2016. It aims to consolidate 13 conflicting Pre-Insolvency and Bankruptcy Codes into a unified Insolvency and Bankruptcy Code.
As per the blog post by the Indian Chamber of Commerce, on October 5, 2018, Insolvency and Bankruptcy Board of India (IBBI) amended the Insolvency Resolution Process for Corporate Persons under the IBBI Regulations 2016.
Under this Resolution, Professional is needed to circulate the minutes of the meeting via electronic means to authorized representatives. The regulation will allow a financial creditor to vote after the circulation of minutes of the meeting.
Also, on October 22 2018, adoption of UNCITRAL Model of Cross Border Insolvency was proposed by the 14 member Insolvency Law Committee headed by the Corporate Affairs Secretary – Injeti Srinivas to deal with cross border insolvency issues.
Amendment to Insolvency and Bankruptcy Code 2016 (IBC) that allowed home buyers to be treated as financial creditors and that seeks to set up a special dispensation for small sector enterprises was passed first by Lok Sabha on July 31, 2018, and then in Rajya Sabha on August 10, 2018.
Below are the Section-wise details that either got amended or got updated till date:
- Section 5: Clause (12) and (15)
- Section 7: Subsection (1)
- Section 11: Addition of Explanation II
- Section 14: Subsection (1)- the addition of Explanation, the addition of subsection (2A)
- Section 16: Subsection (1)
- Section 21: Sub section (2), clause (a) and (b) of sub section (6A)
- Section 23: Subsection (1)
- Section 29A: Clause (c) – Explanation I, Clause (j) – Explanation I
- Section 32A: Addition of section (32A)
- Section 227: Insertion of Explanation
- Section 239: Sub section (2)- after clause (f) – addition of clauses (fa), (fb) and (fc)
- Section 240: Sub section (2)- addition of clause (ia) under sub section (2A) of section (14)
Below are focus points of the changes made in the Insolvency and Bankruptcy Code:
- Easing of Insolvency rules for small enterprises and homebuyers by treating them as financial creditors.
- A creditor cannot sell or transfer an asset, which is subject to the security interest, to an individual who is not eligible under the Insolvency and Bankruptcy Board of India (Liquidation Process – Amended) Regulations 2020 to submit a resolution plan for the insolvency process.
- As per Section (2A) Where the interim resolution professional or resolution professional, regards the supply of goods or services essential to protect and preserve the value of the corporate debtor and oversee the operations of such corporate debtor as going-concern, in such situation the supply of goods or services will not be eliminated, suspended or interrupted during the term of a moratorium, besides where the dues are not paid by the corporate debtor due to supply during the moratorium period or in circumstances as may be specified.
- As per Section (11) – Explanation II, a corporate debtor can initiate a corporate insolvency resolution process against another corporate debtor.
- Changes in Section (29A) to ensure that only those are disqualified who contributed to the downfall of the corporate debtor.
- As per Section (32A), the liability of a corporate debtor for an offence committed before the start of the corporate insolvency resolution process shall discontinue, the corporate debtor shall not be contested for such a transgression from the date the Adjudicating Authority has approved the resolution plan under section 31.
Conclusion: From the recent trends in the Amendments being made in the existing laws, it can be said that future amendments in the current statutes and The Insolvency and Bankruptcy Act will continue to happen to accommodate the changing future conditions and to meet the future requirements.
How “SOLVEMINT” Can Help You?
SOLVEMINT provides you with the Insolvency Resolution and Liquidation Management Software, which is a complete suite of insolvency software to ease out the process of Corporate Insolvency Resolution and Liquidation while ensuring transparency, communication, and provability in accordance to the latest Insolvency and Bankruptcy Code.
Solvemint provides an Online Software for Corporate Insolvency Resolution Process (CIRP) Management for Insolvency Professionals & Resolution Professionals in India and manages insolvency issues through – Stakeholder Management, Claims and EOI Management, and Status Page, Reporting & Analytics. It comprises a complete suite of software to ease out the process of CIRP.
SOLVEMINT is the best Insolvency Management Software providing Insolvency Service to Resolution Professionals It provides you with a user friendly and straightforward to use interface to keep track of everything. It also provides the option of being hosted as an on-premise solution.
- Evaluates the best debt solution
- Insolvency and bankruptcy code compliant
- Collect payments and redistributes to creditors
- Tracks all incoming and outgoing finances
- User-friendly and completely secure
- Automated emails and texts
- Integration with apps and services
You may also like
In recent times due to coronavirus, we are seeing financial institutes tumbling, major economic factors turning red, and global recession looming. During the lockdown period, when economic activities around the world have stopped, stock exchanges have crashed, and investors are pulling out money.
- Apr 20
- 4 mins read
- April 20, 2020
- 4 mins read
- April 18, 2020
- 4 mins read
- April 15, 2020
- 4 mins read
- April 13, 2020
- 3 mins read
- April 9, 2020
- 4 mins read
Subscribe to Solvemint
I want the latest update in...