Application
| Topics | |
| 1. Trade Unions will be considered as an entity and section 2(d) of I B Code will apply to them. | |
| 2. Sole proprietorship firms / individuals come within the ambit of section 2(g) of the Code and are eligible to be considered as an entity. | |
| 3. Government companies performing any sovereign functions cannot be brought under IBC. | |
| 4. Insolvency proceedings can be initiated against Personal Guarantors. | |
| 5. Section 2(e), which was brought into force on 23.11.2017 would, when it refers to the application of the Code to a personal guarantor of a corporate debtor, apply only for the limited purpose contained in Section 60(2) and (3). | |
| 6. Societies are not Corporate Persons, hence exempt from the ambit of IBC. | |
| 7. The word `Person', is defined as per Section 3 (23) (d) of the I & B Code, 2016, which includes a `Trust', therefore, there is no `Fetter' / `Embargo' or a `Legal Impediment', for a `Trust', to be a `Resolution Applicant' | |
| 8. Effective 1.11.2016, Section 4(b) of the Repeal Act has been amended by Section 252 of the Insolvency and Bankruptcy Code of 2016 and provisions have been made therein akin to those in repealed Section 4(b) except that reference by a company in respect of an abated proceeding is to be made to the National Company Law Tribunal within 180 days of the Code coming into force. | |
| 9. Trusts have been recognized by law as juristic persons. A Trust having two or more persons will fall within the ambit of 'association of individuals' and thus such a Trust is a company. | |
| 10. A Trust is not a ‘legal entity’ or ‘juristic person’. However, a Trust may act or even be treated as an entity for certain legal purposes and not all legal purposes. | |
| 11. An entity which is non-existent in the eye of law, cannot move a petition under section 7 /9 of I B Code. |