My company in Rohini 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) if your company in Rohini cannot pay its debts.

The Insolvency and Bankruptcy Code, 2016 (IBC) provides a comprehensive legal framework for resolving insolvency and bankruptcy in India. The process can be initiated by either the creditors or the corporate debtor itself. Here are the key points and steps involved in filing for insolvency:

• Eligibility Criteria:
  • The company must be a corporate person as defined under Section 3(7) of the IBC.
  • It must be unable to pay its debts, which is defined under Section 4 of the IBC, indicating that the company has defaulted on its payment obligations for an amount exceeding Rs. 1,00,000.
• Filing Application:
  • The application for initiation of Corporate Insolvency Resolution Process (CIRP) can be filed with the National Company Law Tribunal (NCLT) under Section 7 of the IBC.
  • The application must be accompanied by the necessary documents, including financial statements, a list of creditors, and evidence of default.
• Payment of Fees:
  • The filing fee varies depending on the amount of the claim and must be paid as per the prescribed fee schedule under the IBC.
• Admission of Application:
  • The NCLT will examine the application and decide whether to admit it within 14 days of filing, as per Section 12 of the IBC.
  • If admitted, the NCLT will appoint an Interim Resolution Professional (IRP) to oversee the resolution process.
• Resolution Process:
  • The CIRP lasts for a maximum of 180 days, extendable by another 90 days, during which the IRP will manage the company and try to find a resolution.
  • Creditors will participate in the process and can propose a resolution plan for approval.

It is advisable to consult with a legal professional specializing in insolvency to navigate the complexities of the IBC and ensure compliance with the necessary legal requirements.