In Today’s News:
- IBC pause extended for three more months.
1. IBC pause extended for three more months
The Central government has suspended the operation of the Insolvency and Bankruptcy Code, 2016 (IBC) by another three months in order to protect companies in distress due to the COVID pandemic. The Code was earlier suspended for six months from 25 March to help the firms recover from the financial distress due to the global pandemic. During the suspension of IBC codes, these firms are protected from being referred to insolvency proceedings.
Prelims GS – Economic Development
(Note: Key points for Prelims have been covered very precisely below. Very important Article)
- Insolvency and Bankruptcy Code is an Act to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms, and individuals in a time-bound manner for maximization of value of assets of such persons, to promote entrepreneurship, availability of credit, and balance the interests of all the stakeholders including alteration in the order of priority of payment of Government dues and to establish an Insolvency and Bankruptcy Board of India, and for matters connected therewith or incidental thereto.
- The provisions of this Code shall apply to—
- (a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law;
- (b) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act;
- (c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009);
- (d) such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf.
- Adjudicating authority for LLPs and companies: National Company Law Tribunal
- Adjudicating Authority for Individuals and Partnership firms: Debt Recovery Tribunal
- The corporate insolvency resolution process shall mandatorily be completed within a period of three hundred and thirty days(330 days) from the insolvency commencement date, including any extension of the period of corporate insolvency resolution process granted under section 12 and the time taken in legal proceedings in relation to such resolution process of the corporate debtor.
Click here to view the official document of IBC.
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