My company in Bikaner cannot pay its debts; can I file for insolvency under IBC?

Detailed Legal Analysis

Yes, you can file for insolvency under the Insolvency and Bankruptcy Code, 2016 (IBC) if your company in Bikaner cannot pay its debts.

The IBC provides a structured framework for the resolution of insolvency and bankruptcy, applicable to companies as well as individuals. Below are the key steps and requirements you need to consider when filing for insolvency:

• Eligibility Criteria:
  • Your company must be registered under the Companies Act, 2013.
  • The company must be unable to pay its debts, defined as liabilities exceeding assets.
  • Minimum default amount must be ₹1,00,000 as per Section 4 of the IBC.
• Filing for Corporate Insolvency Resolution Process (CIRP):
  • File an application with the National Company Law Tribunal (NCLT) under Section 7 of the IBC.
  • The application must be accompanied by the required documents, including financial statements, proof of default, and a resolution passed by the board of directors.
• Information Utility (IU):
  • Obtain a certificate of default from an Information Utility, which provides evidence of the default.
• Admittance of Application:
  • The NCLT will admit the application if it meets the criteria and is satisfied with the evidence provided.
  • The resolution process typically begins within 14 days of filing the application.
• Appointment of Interim Resolution Professional (IRP):
  • Once the application is accepted, the NCLT appoints an IRP to manage the affairs of the company during the CIRP.
• Resolution Plan:
  • The IRP will invite resolution plans from potential resolution applicants.
  • The resolution plan must be approved by a majority of the creditors.
• Completion of CIRP:
  • If a resolution plan is approved, it is implemented; otherwise, the company may be liquidated.
  • Liquidation proceedings will follow under Section 33 of the IBC if no resolution is found.

In conclusion, if your company in Bikaner meets the eligibility criteria and follows the necessary procedures, you can file for insolvency under the IBC to seek a resolution for your debts.