IP (Insolvency Professional) :- Meaning of IP and Services provided by IP.
IP (Insolvency Professional ) is a relatively new profession for Cost and Management Accountants (CMA), Company Secretaries (CS) , Chartered Accountants (CA) and Advocates with over ten years experience as ‘Insolvency and Bankruptcy Code ‘2016 came into effect in late 2016.
Passed out candidates of ‘The Insolvency Examination ‘ being conducted by IBBI (Insolvency and Bankruptcy Board of India – which is the governing body for this profession and all related matter related to this profession, proceedings under this code/act ) are after registration and enrolment become Insolvency Professional .
The Act so far been notified for Companies and LLPs (applicable for a due amount of Rs.1 Lakh/more from them ). For Individuals and firms , it is yet to be notified (applicable for a due amount of Rs.1000-/ 10000/- as would be notified.
For Companies/LLPs the Act is applicable in the following types of services where the due amount is one Lakh or more to them and the amount is due to anyone (including Co./LLP/Individual/Firm.) :
a>For Financial Creditors :- Financiers :- Applicable if due amount is one lakh or more.
b>For Operational Creditors :- Supplier of Goods and Services :- Applicable if due amount is one lakh or more.
c> For Employees and Workmen :- Salaries / Wages :- Applicable if due amount is one lakh or more.
Besides these promoters can also voluntarily liquidate their organisation under this code to make themselves free from not so fruitful endeavours , to be hassle-free from running it ,compliances and future disputes.
Why this act ?
The essence of this act is the timeline:- The previous mechanisms of RBIs- SDR/CDR and S4A had been made ineffective by absence of strict timelines and litigations which now has been made more stringent through this Act.
The Process is follows :-
Once the Corporate Due is proved and NCLT (National Company Law Tribunal) admits the application the Resolution Process Starts if the Operational Creditor / Employee / Workmen would not be paid within ten days / or Financial creditor proves his claim . Stages are
IP as IRP –Interim Resolution Professional is appointed for 30 days to check the claims and form CoC( Committee of Creditors )
IP as RP- Resolution Professional is appointed for 180 days (to appoint valuer and to put the IM (Information Memorandum to Resolution Applicants –Investors ) to sell the company preferably as a going concern.
IP as Liquidator :- If the efforts would go in vain to revive or sell the company as a going concern , the Liquidator would sell the company as a slump sale( whole undertaking ) preferably or in parcels (different assets to different purchaser )
NCLT has now eleven benches in ten (Delhi 1-Principal Bench+1 ) cities having jurisdiction depending on the Registered Office of the Co.in states .
The appellate authority NCLAT ( National Company Law Appellate Tribunal ) is in Delhi.
Aggrieved persons with the decision of NCLAT would appeal to Supreme Court.
IBBI (Insolvency and Bankruptcy Board of India) is the governing body for this profession and all related matter related to this profession, proceedings under this code/act )
Indeed a very helpful article notifying about the latest happenings in insolvency profession. Very informative.
Thanks . Keep on searching for latest informations on Insolvency Professional services.
very informative.
Thanks . Keep on searching for latest informations on Insolvency Professional services.
Good
Thanks . Keep on searching for latest informations on Insolvency Professional services.
Informative. Let’s have a discussion .
Thanks . Really IBC 2016 is an Act in right direction to solve the NPA problem and bring discipline in debtors . Looking forward for a discussion.
Well informative article. I have some interest in this field as I am facing a problem. Contacting you.
Thanks . Really IBC 2016 is an Act in right direction to solve the NPA problem and bring discipline in debtors . Looking forward for a discussion.
What is the position in the case of Partnership Firm ?
Individuals/Firms as Debtor are not yet covered as soon it is going to be notified but they can take action now against Company/ LLP for their dues as Financial Creditor (Financiers ) / Operational creditor ( Employee /Worker / Supplier of Goods and Services ) under this code. Thanks.
Notifications for Individual and Firms are yet to come
Are Individuals also covered ?
Individuals/Firms as Debtor are not yet covered as soon it is going to be notified but they can take action now against Company/ LLP for their dues as Financial Creditor (Financiers ) / Operational creditor ( Employee /Worker / Supplier of Goods and Services ) under this code. Thanks.
Notifications yet to come
Fantastic simplification of the code. really elucidate the pros and cons. Looking forward meeting you.
Thanks . Please follow my next post.
Is it really helpful to solve the disputes ?
The essence of this code is the timelines which will help to solve the disputes .Thanks .Please follow my next post.
Can you please brief more about the worker and employees claim ?
Workers and employees are getting priority of payments in the waterfall .Follow my next post please . Thanks
Hi good information . Waiting for next article.
Thanks . Keep tagging in.
Can you tell me how notices can be served ?
Please follow our subsequent posts. Thanks
What if the corporate debtor is bankrupt already ?
The corporate debtors account would be investigated and I think the word ‘bankrupt’ used here to mean that it may not have assets.
Informative.
Thanks .
Good information.
Thanks
Can you please give me guideline as I had supplied my product and the firm is yet to pay after one year . How can you help me.
IP can help you to get your dues as they may be entrusted with the power , if the Corporate debtor would not pay you after serving of notice
I am an employee and the company is not paying me for last eight months . What are the remedies available to me ?
You can go for actions under IBC ‘2016 with the help of an IP
Financial Creditor , I think I am as I had given loan to a company in terms of Finance at an interest . The company is not paying me ,
Yes . You are a financial creditor. You can go for time-bound resolution with the help of an Insolvency Professional under Insolvency and Bankruptcy Code ‘2016 , provided the loan/Due amount is more than 1 Lac and the debtor is a corporate debtor as of now.
Good
What is main difference between insolvency and bankruptcy as per code 2016 and 2018
Sir, The Code/Act is IBC’2016. So the original Act is of 2016 and if the Insolvency and Bankruptcy difference is concerned , Insolvency is being used as a term for Company/firm and Bankruptcy is being used as a term related to individuals in common language. Thanks keep posted.
Hi there! Such a nice post, thank you!