Insolvency And Bankruptcy Code

The Insolvency and Bankruptcy Code, 2016 (the "IBC"), that was passed by Parliament and received Presidential assent on May 28, 2016, aims at a significant overhaul of the existing legal framework of insolvency and bankruptcy resolution. The IBC seeks to consolidate the laws relating to insolvency and bankruptcy resolution for corporates, limited liability partnerships, partnership firms, individuals and other body corporates as may be notified by the Central Government from time to time. The Central Government now has much work to do in establishing the institutional framework required to implement the IBC before the new law can take effect. This period is also a good time for corporate debtors and creditors to prepare themselves for the new regime. In this Update, we discuss the key provisions of the new legislation that our corporate clients and lending institutions should be aware of in structuring and managing their financing arrangements.¹