The Insolvency and Bankruptcy Code, 2016 (IBC) consolidated India's insolvency framework into a single, time-bound process. For businesses — whether as a creditor or a corporate debtor — understanding its broad mechanics helps in responding to financial distress in a structured way.
The resolution process in outline
The Corporate Insolvency Resolution Process (CIRP) can be initiated by financial creditors, operational creditors, or the corporate debtor itself, on the occurrence of a default. Once admitted, the process is conducted under a resolution professional and overseen by a committee of creditors.
- Initiation on default, subject to applicable thresholds
- Appointment of an interim resolution professional and a moratorium
- Formation of the committee of creditors (CoC)
- Invitation, evaluation, and approval of a resolution plan
- Liquidation only where resolution is not achieved
What businesses should keep in view
Early, accurate assessment of the financial position is often decisive. Reliable books, a clear view of liabilities, and well-prepared documentation materially affect how a business can participate in or respond to proceedings.
This is a general overview and not legal or professional advice. IBC matters are fact-specific and are subject to ongoing amendments and judicial interpretation.
This article is provided for general informational purposes only and does not constitute professional advice. Please obtain advice specific to your circumstances before acting.
