Insolvency and bankruptcy code 2016 CA Final | Corporate & Economic Laws | English | CS Sai (Part 1) | Summary and Q&A

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January 20, 1970
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Insolvency and bankruptcy code 2016 CA Final | Corporate & Economic Laws | English | CS Sai (Part 1)

TL;DR

The Insolvency and Bankruptcy Code 2016 aims to provide a time-bound process for resolving insolvencies in India, consolidating various laws and protecting the rights of creditors.

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Questions & Answers

Q: Why was the Insolvency and Bankruptcy Code 2016 introduced?

The code was needed to address the existing issues in India's insolvency laws, such as the multiplicity of laws and lengthy resolution processes.

Q: What is the difference between insolvency and bankruptcy?

Insolvency refers to a state where liabilities exceed assets and the debtor is unable to repay debts over time. Bankruptcy, on the other hand, refers to the legal process of liquidating assets to repay creditors in cases of untreated insolvency.

Q: Who can initiate the Corporate Insolvency Resolution Process (CIRP)?

The CIRP can be initiated by a corporate debtor, a financial creditor, or an operational creditor.

Q: What is the role of the Insolvency and Bankruptcy Board of India (IBBI)?

The IBBI is the regulatory authority overseeing the implementation of the Insolvency and Bankruptcy Code. It regulates the insolvency professionals and ensures the smooth functioning of the code.

Summary & Key Takeaways

  • The Insolvency and Bankruptcy Code 2016 was introduced to address the issues related to insolvencies in India and provide a streamlined process for resolution.

  • Insolvency is a state where liabilities exceed assets and the debtor is unable to repay debts over time.

  • The code has two stages: Insolvency Resolution Process (IRP) and Liquidation. The IRP aims to revive the company, while liquidation involves selling the assets to repay creditors.

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