My company in Haridwar 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 (IBC) 2016 if your company in Haridwar cannot pay its debts.

Under the IBC, the resolution process can be initiated by either the creditors or the corporate debtor (the company itself) when there is a default in payment. The process involves several steps and requirements which are outlined below:

• Eligibility: Ensure that your company is classified as a corporate debtor, which includes registered companies under the Companies Act, 2013.
• Default Threshold: The minimum amount of default that qualifies for insolvency proceedings is ₹1,00,000 (Section 4 of IBC).
• Application Filing: You need to file an application for insolvency with the National Company Law Tribunal (NCLT) in your jurisdiction. The application can be filed under:
• Section 7 of IBC by financial creditors.
• Section 9 of IBC by operational creditors.
• Section 10 of IBC by corporate debtors themselves.
• Documentation: The application must include:
• A copy of the debt and evidence of default.
• Company resolution (if applicable).
• Details of the proposed insolvency professional.
• Admission of Application: After the application is filed, the NCLT will review the application and, if satisfied, will admit it and initiate the Corporate Insolvency Resolution Process (CIRP) within 14 days as per Section 7(4) or Section 9(5) of the IBC.
• Moratorium: Upon admission, a moratorium period is imposed, during which no legal proceedings can be initiated against the company, and the management of the company is transferred to the insolvency professional.
• Resolution Plan: A resolution plan must be prepared within 180 days (extendable up to a maximum of 330 days) for the revival of the company or repayment to creditors (Section 12 of IBC).
• Liquidation: If the resolution plan fails, the company may be liquidated under the provisions of the IBC (Section 33).

It is advisable to consult with an insolvency professional or legal expert to guide you through the application process, ensure compliance with all requirements, and represent your interests before the NCLT.