Now, your debtor can’t mess up with you , thanks to The Insolvency And Bankruptcy Code,2016
With the amendment in the Companies Act 2013 the provision for winding up of the company for the reasons due to unable to pay the debt has been omitted.
Now, if their case is genuine, the only remedy available to them is declaring bankruptcy under the Insolvency and Bankruptcy code 2016.
That’s not all. There are more and separate provisions for financial creditors and the other creditors:
- In case of financial creditor, Two or more financial creditors can file a single petition jointly with the proof of the default.
- The financial creditor can name any professional of his choice to act as interim resolution professional.
- Now, the remedy within a demand notice must be replied within 10 days of the receipt of the same. Further such operation creditor must also annex (along with the notice) the invoices and statement of account, which was not the case in the Companies Act.
- For corporate creditor, the most important part of the bankruptcy code is the disqualification clause . A.Corporate entities who are undergoing corporate insolvency resolution B. Corporate debtors or financial creditor who has violated any of the terms of resolution plan which was approved under the Insolvency and Bankruptcy code 2016.
- Now, there is an obligation to complete insolvency resolution process within 180 days from the date of admission of application to initiate the process.
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