What is Bankruptcy code?

• The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India that administers the insolvency proceedings and establishes a framework for insolvency resolution processes effectively
• The Insolvency and Bankruptcy Code was introduced by (FM) Arun Jailtely in December’15 and was subsequently passed by the Lok Sabha on 5 May’16. However the act was finally approbated on 28 May 2016.
• Key Features
  • The Code outlines separate insolvency resolution processes for individuals and companies
  • The Code acts as a regulator by establishing the Insolvency and Bankruptcy Board of India.
  • The board oversees the insolvency proceedings in the country and regulates the entities registered below it. The Board has 10 members, which includes representatives from the Ministries of Finance and Law, and the Reserve Bank of India.
  • The insolvency process isaccomplished by licensed professionals. These professionals also control the assets of the debtor during the insolvency procedure.
  • The Code proposes two distinct tribunals to supervise the process of insolvency resolution, for individuals and companies:

(i) The National Company Law Tribunal for Companies and Limited Liability Partnership firms;

(ii) The Debt Recovery Tribunal for individuals and partnerships