IBC: Government Notifies Regulations For Personal Guarantors To Corporate Debtors
The government on Wednesday notified the regulations for personal guarantors to corporate debtors under the insolvency law.
Under the Insolvency and Bankruptcy Code, individuals are classified into three classes -- personal guarantors to corporate debtors, partnership firms and proprietorship firms, and other individuals.
On Nov. 15, the corporate affairs ministry said provisions related to personal guarantors to corporate debtors would be effective from Dec. 1.
Regarding the new rules, the ministry said these "provide for the process and forms of making applications for initiating insolvency resolution and bankruptcy proceedings against personal guarantors to corporate debtors, withdrawal of such applications, forms for public notice for inviting claims from the creditors, etc".
According to the Code, where an application for insolvency resolution or liquidation proceeding of a corporate debtor is pending before the National Company Law Tribunal, an application related to insolvency resolution or liquidation or bankruptcy of a corporate guarantor or a personal guarantor can also be filed before the tribunal.
"Insolvency resolution, liquidation or bankruptcy proceeding of a corporate guarantor or a personal guarantor of the corporate debtor pending in any court or tribunal shall stand transferred to the NCLT dealing with insolvency resolution or liquidation proceeding of such corporate debtor," the ministry said in a release.
The provisions of the Code related to corporate processes -- insolvency resolution, fast track resolution, liquidation and voluntary liquidation -- have already been operationalised.