Bankruptcy restructuring.pptx - 1 Restructuring in Bankruptcy(Insolvency and Bankruptcy code 2 Code A specific type of action made by legislature that

Bankruptcy restructuring.pptx - 1 Restructuring in...

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Restructuring in Bankruptcy (Insolvency and Bankruptcy code) 1
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Code A specific type of action made by legislature that tries to cover a complete system of laws is called a CODE. It is enacted by a process of codification. 2
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What is Insolvency and Bankruptcy? Insolvency is when an individual, corporation, or other organization cannot meet its financial obligations for paying debts as they are due. Bankruptcy is the legal process whereby financially distressed corporate, firms, individuals, and occasionally governments resolve their debts. 3
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Causes Economic Factors Industry weakness Poor location/product Financial Factors Too much debt Insufficient capital Combination of factors 4
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What is Insolvency and Bankruptcy Code? The Insolvency and Bankruptcy Code, 2016 was introduced in Lok Sabha in December 2015. It was passed by Lok Sabha on 5 th May 2016. The Code received the assent of the President of India on 28 th May 2016. However on 1 st December, 2016 the provisions related to Corporate Insolvency Resolution Process came into Force It is an, Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximisation of value of assets of such persons, to promote entrepreneurship, availability of credit and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto . 5
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6 Applicability The provision s of this Code shall apply to Any company incorporated under the Companies Act, 2013 or under any previous company law any other company governed by any special Act for the time being in force any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf personal guarantors to corporate debtors partnershi p firms and proprietor ship firms
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Objectives 7
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To consolidate and amend various laws relating to reorganization and insolvency resolution of Corporate persons /partnership /individual. To promote Entrepreneurship To provide Adjudicating Authority – “ National Company Law Tribunal (NCLT)” for “ corporate persons” and “ Debt Recovery Tribunal (DRT)” for firms and Individual . To Complete the Insolvency Resolution Process in time bound manner Maximization of value of assets of persons To make availability of credit and balance the interest of all the stakeholders in rehabilitation/restructuring of business process Introduction of Insolvency Professionals ( “IP” ) to ensure more professionalism and to bring efficiency in resolution proceedings.
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