IBC Glossary: 30 key terms explained
The Insolvency and Bankruptcy Code has its own vocabulary. Here are the 30 terms that come up most often, each explained in plain English.
IBC
The Insolvency and Bankruptcy Code, 2016 — India's unified law for the time-bound resolution of insolvency for companies, partnerships and individuals.
CIRP
Corporate Insolvency Resolution Process — the process under the IBC to resolve a company's insolvency, either by a resolution plan or, failing that, liquidation.
NCLT
National Company Law Tribunal — the Adjudicating Authority that admits and supervises corporate insolvency cases.
NCLAT
National Company Law Appellate Tribunal — hears appeals against NCLT orders.
IBBI
Insolvency and Bankruptcy Board of India — the regulator of insolvency professionals, agencies and processes.
Moratorium
A calm period under Section 14 that begins on admission of a CIRP, staying suits, recovery and enforcement against the corporate debtor.
Committee of Creditors (CoC)
The body of financial creditors that takes the key commercial decisions in a CIRP, voting in proportion to the debt owed.
Interim Resolution Professional (IRP)
The insolvency professional first appointed on admission to take control of the company and constitute the CoC.
Resolution Professional (RP)
The insolvency professional who conducts the CIRP after being confirmed by the CoC — running the company and managing the resolution.
Liquidator
The insolvency professional appointed to sell the company's assets and distribute proceeds when no resolution plan succeeds.
Resolution Plan
A proposal by a resolution applicant to revive the corporate debtor, setting out payments to creditors, funding and implementation.
Resolution Applicant
A person who submits a resolution plan to take over and revive the corporate debtor.
Corporate Debtor
The company undergoing the insolvency process.
Financial Creditor
A creditor owed a financial debt (money borrowed against interest), such as a bank or lender.
Operational Creditor
A creditor owed an operational debt for goods or services, such as a supplier or employee.
Section 7
The provision allowing a financial creditor to apply to the NCLT to begin CIRP against a defaulting company.
Section 9
The provision allowing an operational creditor to apply for CIRP after a demand notice under Section 8.
Section 29A
The bar that makes certain persons — including wilful defaulters and defaulting promoters — ineligible to submit a resolution plan.
Section 30(2)
The compliance checklist a resolution plan must meet, covering insolvency costs, minimum payments to creditors and legality.
Liquidation
The winding-up of a company where its assets are sold and proceeds distributed under the Section 53 waterfall.
Liquidation Value
The estimated realisable value of the company's assets if it were liquidated on the insolvency start date.
Fair Value
The estimated realisable value of the company's assets in an orderly sale between a willing buyer and seller.
Information Memorandum
The document prepared by the RP giving prospective applicants the information needed to submit a resolution plan.
Personal Guarantor
An individual who has personally guaranteed a company's debt and can face a separate insolvency process under the IBC.
SARFAESI
A separate law letting secured creditors enforce security and take possession of secured assets without going to court.
NPA
Non-Performing Asset — a loan account where payments are overdue, a key trigger and eligibility factor under the Code.
Avoidance Transactions
Suspicious pre-insolvency transactions — preferential, undervalued, extortionate or fraudulent — that can be challenged to claw back value.
Going Concern
Running the company as an operating business during the CIRP to preserve value and employment.
Clean-Slate Doctrine
The principle that, once a resolution plan is approved, past claims are extinguished so the revived company starts afresh.
PIRP
Pre-Packaged Insolvency Resolution Process — a faster, debtor-led resolution route available to eligible MSMEs.
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