Application of IBC

A local cricket club, a Mumbai pharmaceutical company, a neighbourhood chartered accountancy firm and a man who stood guarantee for his brother’s company all owe money they cannot repay. Does the same law deal with all four? The answer depends on section 2 of the Insolvency and Bankruptcy Code, which decides who stands inside the Code and who stands outside it.

In two minutes

Section 2 applies the Code to companies, LLPs, notified bodies, personal guarantors to corporate debtors, partnership and proprietorship firms, and individuals; everyone else, and every debt below the thresholds in ss.4 and 78, falls outside.

The rest of this chapter

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