Section 56 of IBC : Section 56: Time Period For Completion Of Fast Track Corporate Insolvency Resolution Process
IBC
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Explanation using Example
Imagine a small tech startup, "InnovateX", which specializes in AI software, is facing financial difficulties and is unable to pay its debts. The creditors of InnovateX file an application for initiating a fast track corporate insolvency resolution process, as InnovateX meets the eligibility criteria for such a process due to its small scale and simpler organizational structure.
As per Section 56(1) of The Insolvency and Bankruptcy Code, 2016, the process needs to be completed within 90 days from the commencement date. This means that the resolution professional, the committee of creditors, and InnovateX must work diligently to agree upon a resolution plan or decide to liquidate the company within this timeframe.
However, during ...
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