With numerous companies facing the wrath of the COVID-19 pandemic and the resulting financial challenges, the Insolvency and Bankruptcy Code ("IBC"), still in its early stages, has sparked a lot of debate.
The latest amendment to the IBC renders Promoters of a company ineligible to participate as a resolution applicant.
Wilful defaulters are considered as entities that do not pay back money despite the ability to do so. The concept of 'Wilful Defaulter' has been explained by the Master Circular issued by RBI (under the Banking Regulation Act, 1949).
An Associate Company is a company which is significantly influenced by another company but is not a subsidiary of the company having such influence. Understand the nuances of the definition of an associate company, how it appears in IBC, Companies Act & Indian Accounting Standards.
SEBI has recently tweaked the 25% Minimum Public Shareholding (MPS) requirement for companies undergoing insolvency process. It also segregated assets as well as liabilities of mutual funds & eased norms governing promoter participation in follow-on public offers.
A 'Connected Person' under the IBC refers to a person within the immediate company network. The definition highlights one key differentiator: the existence of a personal relationship between the company and the person. Read on to understand the nuances of identifying a Connected Person.
Section 29A is a restrictive provision and specifically lists down the persons who are not eligible to be resolution applicants. It is relevant to the sale during liquidation, as well as sale outside the liquidation process.