Insolvency and Bankruptcy Fund

Your housing society keeps a sinking fund so that when the lift breaks down, repairs do not wait for a general meeting to argue about money. Insolvency has the same problem. When a company collapses, there may be no cash to pay the workers, protect the stock or meet the small costs of the process itself. Section 224 of the Code creates a fund for exactly that kind of emergency, and lets a contributor draw back from it.

In two minutes

Section 224 forms the Insolvency and Bankruptcy Fund, credited with Government grants, contributions by persons, other receipts and investment income, from which a contributor may seek withdrawal, up to what it paid in, when proceedings are begun against it under the Code.

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