In the current era, which is marked by rapid economic changes as well as evolving business dynamics, the need for an effective mechanism to address insolvency and bankruptcy issues becomes essential. This is where the Insolvency and Bankruptcy code steps in, which has a major impact on real estate laws in India.
The primary objective here is to promote a systematic approach to resolution, with the aim of preserving the value of distressed assets, maximizing recovery for creditors, and ensuring a fair and equitable distribution of resources.
What is Insolvency and Bankruptcy Code?
As the name implies, the Insolvency and Bankruptcy Code (IBC) is a significant piece of legislation that was enacted in our country back in 2016 in order to address the long-standing challenges of bankruptcy and insolvency.
Furthermore, the IBC aims to provide a streamlined and time-bound process for resolving certain issues, promote ease of doing business, and foster a more conducive environment for economic growth.
What are its prime objectives?
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Timely resolution
One of its primary objectives is to ensure a time-bound resolution of insolvency cases. The code introduces strict timelines for various stages of the insolvency process in order to prevent delays. This ultimately helps preserve the value of distressed assets and tends to prevent further deterioration of the financial health of the insolvent entity.
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Stakeholder’s protection
The insolvency bankruptcy code seeks to safeguard and protect the interests of all stakeholders. It basically ensures a fair and equitable distribution of proceeds from the resolution or liquidation process based on a predetermined priority order.
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Investment promotion
By offering a steady and effective insolvency framework, also boosts the confidence of the investor, both domestically as well as internationally. Remember that potential investors are more likely to invest in distressed organizations, knowing that there is simply a clear process for resolving insolvency issues.
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Maximizing Value of Distressed Assets
The IBC aims to maximize the value of distressed assets by facilitating their resolution in a manner that makes sure that the creditors get the highest possible recovery. Here, the focus is on preserving and enhancing the asset value to the benefit of all stakeholders.
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Ease of Doing business
It also streamlines the insolvency and bankruptcy process, making it more efficient and transparent. This enhances the ease of doing business in India by reducing the burden of lengthy and complex proceedings.
Where to find the best lawyers in India who are masters in such cases?
Areness! It is one of the best Law Firm where you can find a solution to all your legal matters. Recently, despite the initial success, a company named StellarTceh (name changed) faced a series of unfortunate events that led to its financial downfall. This was due to a sudden and unexpected shift in market trends that left their flagship product outdated and uncompetitive.
Therefore, as the company struggled to adapt to the changing industry landscape, it found itself on the brink of bankruptcy and insolvency. This is where Areness stepped in and helped them in this overall process.
With a consistently positive track record, these guys have a fantastic team of professionals that will guide you step by step.
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