The Insolvency and Bankruptcy Code, 2016 provides a time-bound process for resolving insolvency of companies and LLPs. A financial creditor, an operational creditor or the company itself can apply to the National Company Law Tribunal when there is a default of ₹1 crore or more.
On admission, an Interim Resolution Professional takes over management and a moratorium stops most legal actions against the company. The corporate insolvency resolution process is to be completed within 180 days, extendable by 90 days, with an overall limit of 330 days including litigation. Only insolvency professionals registered with the Insolvency and Bankruptcy Board of India can act as resolution professionals or liquidators.
Key points
- Minimum default of ₹1 crore to start the process
- Applications are made to the NCLT
- Moratorium on suits and recovery once admitted
- Resolution within 180 days, extendable by 90 days
- This guide is general information only
General information. This topic is explained for general knowledge only. It is not a description of services offered by the firm.
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
