Which law in India deals with insolvency and bankruptcy?

Answer By law4u team

In India, the law that deals with insolvency and bankruptcy is the Insolvency and Bankruptcy Code, 2016 (IBC). The Insolvency and Bankruptcy Code is a comprehensive legislation that was enacted to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner. Key features of the Insolvency and Bankruptcy Code include: Corporate Insolvency Resolution Process (CIRP): The IBC provides a framework for initiating the Corporate Insolvency Resolution Process for corporate debtors. It involves the appointment of an insolvency professional, the formation of a committee of creditors, and a time-bound process for the resolution of insolvency. Liquidation: If the resolution process is not successful, the IBC provides for the liquidation of the corporate debtor. The proceeds from the liquidation are distributed in a specific order of priority among the creditors. Individual Insolvency: The IBC also includes provisions for insolvency resolution for individuals and partnership firms. Adjudicating Authority: The National Company Law Tribunal (NCLT) is the adjudicating authority for corporate insolvency resolution processes, and the Debt Recovery Tribunals (DRTs) handle individual and partnership insolvency cases. Insolvency Professionals: The IBC establishes a regulatory framework for insolvency professionals who play a crucial role in the insolvency resolution and liquidation processes. The Insolvency and Bankruptcy Code, 2016, has been amended over time to address evolving needs and challenges. It is a significant piece of legislation aimed at promoting a time-bound and efficient resolution of insolvency, ultimately contributing to the ease of doing business in India. As laws can be subject to amendments, it's advisable to check for the latest updates and amendments to the Insolvency and Bankruptcy Code or consult legal professionals for the most current information.

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