What is IBC?
IBC stands for insolvency and bankruptcy code which is considered as the biggest insolvency reform act. It has been seeking to consolidate a single law for the existing framework of insolvency and bankruptcy. The bankruptcy law designs a set of rules and processes to resolve all kind of insolvency and bankruptcy issues against the corporate persons. The law has come into force on 28th May 2016 while some of the laws have been implemented on 1st December 2016. And some of the parts are yet to be notified.
To whom it is applicable?
The provisions of the IBC, 2016 are applicable to Individuals, Unlimited Partnership Firms, Limited Liability Partnerships and Companies. The provisions relating to Corporate in the Code, i.e., Limited Liability Partnerships and Companies is notified and in force w.e.f. 1st December, 2016. The provisions related to Individuals and Unlimited Partnership Firms – the Part III of IBC, 2016 is yet to be notified.
The objective of IBC!!!
The objective to frame IBC is to simplify the processes of bankruptcy and insolvency. It ensures the fair negotiations between creditor and debtor by removing the wrong or default information.
- To simplify the processes of insolvency and bankruptcy
- To consolidate all insolvency laws present in India
- To set up a bankruptcy and insolvency law
- To promote entrepreneurship
- To protect the interests of both creditors and debtors
- To give relief to creditors who are waiting for the payments from a very long time
- To revive the company in a time bound manner
- To curb down the companies who are at default in making payments