HoD andAssociate Professor at School of Legal Studies & Governance, Career Point University, Kota, Rajasthan, India
The Insolvency & Bankruptcy Code (IBC) was passed in India in 2016 with the intention of combining and reforming insolvency and bankruptcy legislation. The legislation establishes a time-bound mechanism for resolving insolvency for corporate entities, such as corporations &limited liability partnerships &individuals. The rules for group insolvency are a fundamental aspect of the IBC, since the bankruptcy of one member of a group may initiate the insolvency resolution procedure for the whole group. The goal of this research paper is to look at the IBC's provisions on group insolvency, with an emphasis on the definition of a "group" and the mechanism for resolving group bankruptcy. The article also examines the effects of group bankruptcy on the creditors and shareholders of the group's members. The article begins by defining the idea of a "group" as well as the criteria for deciding whether a collection of corporate individuals is regarded a single economic entity. The article then discusses the IBC laws pertaining to group insolvency, such as initiating the insolvency resolution procedure, the authority of the insolvency resolution professional, and creditors' rights in a group bankruptcy scenario. The report also assesses the effect of group bankruptcy on the group's stakeholders, which include creditors, shareholders, and workers. According to the findings of the research, group bankruptcy may result in considerable financial losses for creditors and owners, as well as job losses for workers. However, the IBC offers a structured framework for addressing group insolvency, which may assist to mitigate these effects and provide a way for impacted firms to recover. Finally, the IBC's rules on group insolvency are crucial in enabling the effective resolution of bankruptcy for corporate people in India. The report emphasizes the need of further research to analyze the efficacy of group insolvency provisions in practice and to suggest possible areas for improvement.
International Journal of Law Management and Humanities, Volume 6, Issue 1, Page 1926- 1939DOI: https://doij.org/10.10000/IJLMH.114246
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