The Insolvency and Bankruptcy Code, 2016
The Insolvency and Bankruptcy Code, 2016 (Act No. 31 of 2016) is primary law, effective from 1 January 2016, governing insolvency resolution, liquidation and bankruptcy for corporate persons, individuals and partnership firms. The supplied text does not name an issuing department, and the version is...
What the Code governs
The Insolvency and Bankruptcy Code, 2016 creates processes for resolving insolvency and distributing assets when debts cannot be dealt with normally. It separately covers corporate persons, individuals and partnership firms, and also regulates the professionals, agencies and information utilities involved in these processes.
For corporate persons, the Code covers insolvency resolution, liquidation, voluntary liquidation and pre-packaged insolvency resolution. For individuals and partnership firms, it provides fresh start, insolvency resolution and bankruptcy processes.
Who may be affected
The Insolvency and Bankruptcy Code, 2016 may affect:
- Corporate debtors and corporate applicants.
- Financial creditors, operational creditors and secured creditors.
- Individuals, partnership firms and their creditors.
- Guarantors whose assets may be considered during a corporate insolvency process.
- Resolution applicants, insolvency professionals, liquidators and bankruptcy trustees.
- Buyers or owners dealing with property forming part of a liquidation estate or bankrupt's estate.
Key provisions
The Insolvency and Bankruptcy Code, 2016 includes provisions for:
- Starting a corporate insolvency resolution process by a financial creditor, operational creditor or corporate applicant.
- A moratorium, public announcement, appointment of an interim resolution professional and creation of a committee of creditors.
- Preparation, submission and approval of a resolution plan.
- Liquidation, including the liquidation estate, liquidator's powers, secured creditors and distribution of assets.
- Review of preferential, undervalued, extortionate and creditor-defrauding transactions.
- Pre-packaged insolvency resolution, including management of the debtor, creditor consideration of a resolution plan and termination of the process.
- Bankruptcy administration, including vesting and distribution of the bankrupt's estate, restrictions on property disposal and treatment of after-acquired property.
- Appeals to the relevant appellate bodies and the Supreme Court, with civil court jurisdiction excluded for the listed corporate and individual processes.
- Offences and penalties involving concealment of property, false information, falsified books, creditor fraud and misconduct.
Regulation and current version
The Insolvency and Bankruptcy Code, 2016 establishes the Insolvency and Bankruptcy Board of India. It also regulates insolvency professional agencies, insolvency professionals and information utilities through registration, governance and conduct requirements.
The supplied version is current as on 2 July 2026 and lists seven amendment Acts, including the Insolvency and Bankruptcy Code (Amendment) Act, 2026.
This summary is generated from the source document to help you find what is relevant. The PDF above is authoritative. For advice on your own property, use LandLens One or speak to a qualified professional.
Common questions
Can the Code affect a property purchase from a company in insolvency?
Yes. The Insolvency and Bankruptcy Code, 2016 covers moratoriums, liquidation estates, secured creditors, asset distribution and certain asset transfers during insolvency. A buyer should establish whether the property forms part of an insolvency or liquidation process.
Does the Code apply only to companies?
No. The Insolvency and Bankruptcy Code, 2016 covers corporate persons, individuals and partnership firms through separate insolvency, liquidation or bankruptcy processes.
Can transactions involving property be reviewed during insolvency or bankruptcy?
Yes. The Code contains provisions concerning preferential transactions, undervalued transactions, transactions defrauding creditors and restrictions on disposing of property in a bankrupt's estate.
Is this the original 2016 version of the Code?
No. The supplied version is updated as on 2 July 2026 and lists amendments made in 2018, 2019, 2020, 2021 and 2026.
