Insolvency refers to inability of any legal person to discharge all its debts as they become due. In context of the Company‟s laws, the word "Insolvency" has been used or defined in India as per Section 433(e) of the Companies Act, 1956. Before introducing the Insolvency and Bankruptcy Code 2016, there was no specific single laws in India to deal with the matter of insolvency and bankruptcy. There were multiple overlapping insolvencies and laws like SICA (Sick Industries Companies Act 1985), BIFR (Board for Industrial and Financial Reconstruction Act 1987). The Insolvency And Bankruptcy Board Of India is a Regulatory Authority which regulates the law and registered entities under it and brings Rules and Regulations, amendments, and notifications in the Code. The Code provides for insolvency professionals as intermediaries who would play a key role in the efficient working of the bankruptcy process. One of the features of the Code is the creation of “IU”. The IPA is any person registered with the Board under section 201 as an insolvency professional agency. NCLT is the jurisdiction and adjudicating authority for Corporate Insolvency and Liquidation of corporate persons. The Insolvency and Bankruptcy Code 2016, is a vital reform that will make it much easier to do business in India.
