Frequently Asked Questions on The Insolvency and Bankruptcy Code, 2016 (Revised July, 2019 Edition)
The Insolvency and Bankruptcy code 2016 was enacted with a purpose to consolidate and amend the laws relating to reorganisation and insolvency resolution of corporate persons, partnership firms and individuals and align Indian law at par with the best practices being followed Internationally.
The intention is to strike the right balance of interests of all stakeholders of the business enterprise so that the corporates and other business entities enjoy availability of credit and at the same time the creditor do not have to bear the losses on account of default. The Code is now in the implementation phase.
With a view to improve Ease of doing Business in India, the Code provides for a time bound process for speedy disposal and also the manner for maximization of value of assets. It will create a win-win situation not only for the creditor and debtor companies, but it will also benefit the overall economy.
The Hon’ble Finance Minister in his Union Budget Speech in February, 2017 also acknowledged the importance of enactment of Insolvency and Bankruptcy Code by mentioning it one of the major reforms taken place last year.
As per the Code, the insolvency resolution processes are to be conducted by the Insolvency Professionals, who are required to be members of an Insolvency Professional Agency which in turn is to be registered with the Insolvency and Bankruptcy Board of India.
Taking this Government’s initiative ahead, the Institute of Chartered Accountants of India formed Indian Institute of Insolvency professionals of ICAI (IIIPI) to enroll and regulate insolvency professionals as its members in accordance with the Insolvency and Bankruptcy code 2016 and read with regulations in November, 2016.
I congratulate the Corporate Laws & Corporate Governance Committee of the Institute of Chartered Accountants of India (ICAI) to take this initiative in bringing out a comprehensive and a handy book on Frequently Asked Questions (FAQs) on the Insolvency and Bankruptcy code 2016 to provide guidance to the members of the profession and other stakeholders for clear interpretation and understanding of the new law.