Insolvency and bankruptcy code 2016 in India is primarily meant to ensure that the operational and financial creditors are paid their dues in a fair and an efficient manner. However, the one that owes them the money i.e. the debtor also is somewhat aided through this. It is for this very reason that the petition of the insolvency resolution can not only be filed by the operational/financial creditors but a corporate debtor as well.
Corporate debtor is corporate applicant
Before we begin with telling you how a corporate debtor files this application, let us a take a deep look into the meant of a corporate applicant. A corporate applicant can be referred to any of the following persons:
- A corporate debtor
- A person who is partnered up with the corporate debtor who is given right to file for insolvency resolution procedure under the MOA and AOA of the company.
- A person who is given the charge of handling the operations and resources of the corporate debtor
- A person who holds control and supervises the financial operations of the corporate debtor.
Therefore, the corporate applicant is going to be the keyword that we are going to be focusing on from this point on.
The process of filing the insolvency application
- Filing the application in a form prescribed under the IBC 2016: This application should be filed correctly and submitted to the adjudicating authority along with the fees of INR 25000/-.
- Along with the application, the following documents have to be provided as well:
- Information pertaining to the account books for the prescribed period.
- Information pertaining to resolution professional as an interim resolution professional.
- A resolution that has to be passed by about 3/4th of the partners/shareholders of the company debtors that approve the insolvency resolution professionals.
- The application that has to be filed for initiating the insolvency resolution process is form 6. Along with this form, you need to attack the documents and information that are given above.
- Once the application is filed to the adjudicating authority (In this case, the NCLT), then within the next 14 days, this authority has to either accept and admit the application or reject it. Once the application is admitted, the insolvency resolution process can begin.
- If the application suffers from either of the following:
- Missing information
Then, the adjudicating authority shall reject the application.
- If the application is rejected, there is no need for the applicant to worry, for they will be given 7 days to rectify the errors. If the errors are rectified, then after the prescribed period, the adjudicating authority is going to accept the application. If not, then the application shall be rejected with no retries allowed.
As you can see, other than the documentation requirements and the necessary voting that is needed in order to file the application, the way to submit the application is pretty simple.