How the corporate insolvency process begins, who can start it and what happens next. General legal information only.
Who can start the process?
- Financial creditors (Section 7), such as banks and lenders, on a default.
- Operational creditors (Section 9), such as suppliers, after serving a demand notice under Section 8 and allowing the statutory period to pass.
- The corporate debtor itself (Section 10).
A minimum default threshold applies. Check the current notified amount before filing.
What happens after admission?
- A moratorium restricts suits, enforcement and recovery against the company.
- An interim resolution professional takes control of the company’s affairs.
- A committee of creditors is formed and considers resolution plans within the statutory timeline.
- If no plan is approved, the company may go into liquidation.
Disputes that are commonly raised
Whether a debt and default exist, whether a pre-existing dispute was raised by an operational debtor, whether the application is within limitation, and whether the applicant is eligible. Each turns on the documents.
Recent changes
The IBC (Amendment) Act, 2026 received assent on 6 April 2026, and most provisions were brought into force from 26 May 2026. Status of some provisions is reported differently, so verify against the Gazette. See our IBC update and the insolvency practice page.
How can Wise & Partners help?
The firm advises creditors and corporate debtors on notices, filings and replies before the NCLT and NCLAT. No outcome can be promised.
Important disclaimer: This article is general legal information, not legal advice. It does not create a lawyer-client relationship and is not an advertisement or solicitation under Bar Council of India rules. Verify current statutes, rules and judgments before relying on it.
