The Insolvency and Bankruptcy Code, 2016 (IBC)
Insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization 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. The Insolvency and Bankruptcy Code is transformational piece of legislation as it seeks to establish an ecosystem for handling Insolvency & Bankruptcy issues. Most importantly it offers an exit plan to all categories of persons-Corporates, Stakeholders, Individuals and Partnership firms, apart from over hauling century old legal framework. Hence it is a game changer in which the Bankers, Courts, Investors and the initiators of insolvency proceedings will have to work in harmony for devising either a survival plan or liquidation of sick units and others facing debt default

Applicability: The act is extends to whole India except part-III of the code to Jammu and Kashmir. The act was enacted and came into force with effect from 28th May 2016. It applicable to : individuals, unlimited partnership firms, Limited liability partnerships, Companies (as per Companies act 2013 or as per any previous law), Companies governed by any special act except so far the said provisions are not inconsistent with the provision of such special act and such other persons as may be notified by the govt.

The four pillars of infrastructures to make the process work effectively are;

• The regulator - (The insolvency and Bankruptcy board of India (IBBI).
• The Adjudicating authority- (National company law Tribunal NCLT for corporate, National company law appellate tribunal NCLAT, Debt Recovery Tribunal for individuals and partnership firms).
• Information utilities (IUs)- a person who is registered with the Board as an information utility (for centralized repository of financial and creditors information).
• A private industry of insolvency professionals (IPs) monitored by private insolvency professional agencies (IPAs).

Key Features of The Insolvency and Bankruptcy Code

• Insolvency Resolution: The Code outlines separate insolvency resolution processes for individuals, partnership firms, limited liability partnership and companies. The process may be initiated by either the debtor or the creditors. A maximum time limit, for completion of the insolvency resolution process, has been set for corporates and individuals. The resolution process will have to be completed in 180 days, which may be extended by 90 days, if a majority of the creditors agree.
• Insolvency regulator: The Code establishes the Insolvency and Bankruptcy Board of India, to oversee the insolvency proceedings in the country and regulate the entities registered under it.
• Insolvency professionals: The insolvency process will be managed by registered professionals. These professionals will also control the assets of the debtor during the insolvency process.
• Bankruptcy and Insolvency Adjudicator: The Code proposes two separate tribunals to oversee the process of insolvency resolution, for individuals and companies: (i) the National Company Law Tribunal for Companies and Limited Liability Partnership and (ii) the Debt Recovery Tribunal for individuals and partnerships.