What is The Insolvency and Bankruptcy Board of India (IBBI )

Insolvency and Bankruptcy Board of India

What is The Insolvency and Bankruptcy Board of India:-

The IBBI, insolvency and bankruptcy board of india falls under Insolvency and Bankruptcy Code 2016, it is a regulator which regulates the profession as well as processes related to insolvency and bankruptcy. 

It regulates bad loan cases reported by various creditors, which are especially involved with banks in India. It works towards resolving any insolvency for corporates, individuals and partnership firms.

  • It was established on 1 October 2016  in New Delhi.
  • Parliament of India is the founder of Insolvency and Bankruptcy Board of India.
  • Dr. M. S. Sahoo is the Chairperson of the Insolvency and Bankruptcy Board of India.

To know what this department does, first let’s understand what Insolvency is –

What is Insolvency ?

Insolvency is a state of financial distress which describes a situation arises due to the inability to pay off the outstanding debts on time to the creditors because the assets are not enough to cover up the liabilities.  

In the case of companies insolvency caused due to the continuous fall in sales, and it doesn’t have enough cash to meet out it’s day to day expenses of the business for which it takes loans from the creditors and banks.

Insolvency can arise from poor cash management, a reduction in cash flow, or an increase in expenses.

IBBI deals with some of these proceedings:

  • Corporate Insolvency
  • Corporate Liquidation
  • Individual Bankruptcy

Functions of Insolvency and Bankruptcy Board of India 

Here we are going to discuss some functions of Insolvency and Bankruptcy Board of India:-

  • Corporate Insolvency resolution process (CIRP):-  The insolvency resolution process is a one under the Insolvency and Bankruptcy Code, 2016, where the National Company Law Tribunal (NCLT) initiates a corporate insolvency resolution process (CIRP).

When a company defaults on making payment to creditors then creditors can file an application in front of NCLT if creditors loss is minimum 1 lac, because  the minimum amount of default for initiation of CIRP is Rs.1,00,000. 

After that NCLT will initiate an IRP interim resolution professional, whose name will be given by the creditor, which can be anyone from the creditor side.

Under IRP, the Insolvency resolution process appointed professional will be having the power to take charge of the company which has defaulted. 

That professional’s main work is taking necessary steps to revive the company.

Appointed professionals would have the power to raise fresh funds to continue operations.

  • Corporate Liquidation:- Liquidation is a process through a company which is going to be shut down and its existence comes to an end, because it is unable to pay its creditors and need to sell off its assets to pay them.

Liquidation process can be initiated under the insolvency and bankruptcy code 2016:- If the IRP interim resolution professional fails to find a resolution on or before the expiry date of insolvency resolution period.Then the company becomes liquidated to pay the creditors by selling off its assets .

In starting of this process first a public announcement shall be made about the corporate debtor being liquidated.And then further process can be done.

  •  Individual Bankruptcy:- As per the IBC Insolvency and Bankruptcy Code, 2016, a creditor can file petition for individual bankruptcy for an amount exceeding as little as Rs 1000 as per the notification by the Central Government. It can be revised upto Rs.1,00,000.

The IBC does contain a chapter relating to insolvency and bankruptcy process for individuals and partnership firms, but the rules for individual bankruptcy are yet to be notified.

Insolvency and Bankruptcy Board of India recently started to promote the development and working and practices of insolvency professionals,insolvency professional agencies and information utilities so now we will talk about these points:-

  • Insolvency Professionals:- An Insolvency Professional is one who is registered with the Insolvency and Bankruptcy Board of India (IBBI). They work for the dissolution process of an insolvent individual, companies, or partnerships.

These professionals get authorization from the IBBI to do work on behalf of such insolvent individuals and companies. 

In the situation of bankruptcy, the insolvency professionals play a big role in liquidating the entity assets and other settlement processes.

  • Insolvency Professional Agencies:- Any registered agency with IBBI becomes insolvency professional agencies, the most important work of these agencies are to regulate the activities of insolvency professionals and ensure their development in the industry. 

These professional members of the agency are required to work as per the terms and conditions of the insolvency agency code. 

These agencies have the primary function of granting membership to insolvency professionals.

These agencies also enquire about the member’s grievances and take steps to resolve those.

  • Information Utilities:- An Information Utility becomes a professional organization after getting registered with IBBI under Section 210 of IBC, 2016.

It works for providing authenticated information about debts and defaults. 

Information Utility plays a big role in storing the financial information of the users.

And it helps the lenders in taking the informed decision about the credit transaction.

It would also make debtors attentive as the financial information is available with the utilities. 

It plays a vital role in the creation of evidence; the information can also be used as evidence in bankruptcy cases.

How do you declare Insolvency in India ?

Before going through this point we should have knowledge about the difference between insolvency and bankruptcy, there is a minor difference between insolvency and bankruptcy.

Insolvency is the state of being unable to pay the money owed, by a person or company on time and bankruptcy is a process of declaring insolvency in india.


When a person becomes insolvent and he wants to become debt free so he files an application to the relevant court where he declares himself as insolvent due to his inability to pay his debts and expenses, seeking to be declared as a bankrupt.

When court decides the appropriation of the personal property of the insolvent among his various creditors. It is the last stage of insolvency and gives a new lease to the insolvent to start a new fresh. 

It relieves the individuals or a company from all the debts and other disadvantages of insolvency.

By following this process people can declare their insolvency in india.

Structure of IBBI

IBBI has a total of 10 members committee which includes one chairperson, representatives from the Ministries of Finance, Law and corporate affairs, and the Reserve Bank of India.

  • Dr. M. S. Sahoo, Chairperson, Insolvency and Bankruptcy Board of India
  • The Insolvency and Bankruptcy Board of India has appointed three people as whole time members:
  1. Sh. Sudhakar Shukla
  2. Navrang Saini 
  3. Mrs. Mukulita Vijayawargiya 
  • The Insolvency and Bankruptcy Board of India has appointed 4 people as Ex-officio Members:
  1. Dr. Shashank Saksena, Adviser (Capital Markets), Department of Economic Affairs, Ministry of Finance
  2. Sh. Gyaneshwar Kumar Singh, Joint Secretary, Ministry of Corporate Affairs
  3. Dr. Rajiv Mani, Joint Secretary and Legal Adviser, Department of Legal Affairs, Ministry of Law & Justice
  4. Sh. Unnikrishnan A, Legal Adviser, Reserve Bank of India
  • The Insolvency and Bankruptcy Board of India has appointed 2 people as part time Members:
  1. Dr. Krishnamurthy Subramanian, Chief Economic Advisor
  2. Sh. B. Sriram, Former Managing Director & CEO of IDBI Bank Ltd.

So here I have given all the information about the IBBI insolvency and bankruptcy board of India and IBC Insolvency and Bankruptcy Code, 2016. 

Which was established to support the falling companies to stand again on their feet by restructuring their credits so that they can repay them easily and make a fresh start. 

I hope all this information will surely work for you and give you knowledge in an easy way which you will be able to understand very easily.

What is a Joint Stock Company ? 10 Very Important Things to Know

What is a Joint Stock Company ?

Here we always talk about start-ups, businesses, companies,and investing in different businesses.

If a person doesn’t have enough money to form a company what should he do? well, that’s where the joint stock company kicks in.

Now lets know what is a joint-stock company?

A Joint Stock Company could be a voluntary association of a group of people to hold on the business.

It’s an association of more than one person who contributes investment into the organization i.e termed as “capital”. 

These people of this group are members of the corporate/organization. 

The partition of the capital of every member in the joint-stock company is known as “share” and each member holding such share is termed “shareholders” and therefore the capital of the corporate/organization is known as “share capital”.

Still, confused? 

Let’s breakdown this down-

In simple words, a joint-stock company is described as a business organization where more than one people are part of the organization or you can also say more than one person invested/owned the organization.

These people are called the shareholders of the joint-stock company. These shareholders own a certain amount of stock in the company known as their “share”.

Any joint-stock company involves shares, which also are encountered as public companies. The holders can either buy or sell the shares after their liking.

After understanding what’s a joint-stock company, it’s important to say that the shares in these sorts of organizations accompany obligations. 

Unlike ordinary or preferred stock, where there aren’t any obligations involved, joint-stock company shares require the holders to vote directly within the company’s management decisions.

Over that, the holders can intervene in how the company’s outstanding debts are handled.

Now that we have understood what is a joint-stock company lets go through some of the features of the joint-stock company there are many features but we will go through some of the important features-

1. Artificial Person: 

A joint-stock company is formed by the law-making body. It is viewed as an’ artificial human’ without any physical form.

Although a Joint Stock Company as a legal person is invisible and intangible, nearly all the rights of a natural person are enjoyed by a company.

It can sign contracts with other parties, buy and sell assets and properties, appoint people as Executives, and employee also an artificial legal person is controlled through the board members of the joint-stock company which give all its rights.

2. Separate Legal Entity: 

Joint stock company has separate legal identities and representatives relative to partnerships or ownership.

If a corporation is a joint stocked, as already stated, it receives a legal identity. There is no special responsibility for a member of a joint-stock company.

Therefore, in terms of financial or business activities, the joint-stock company will not rely on its members because they will be led by the Management Board.  

Its shareholders will not be held responsible for any conduct of the joint-stock company.

3. Limited Liability: 

In the joint-stock company, partners are generally limited throughout liabilities by assurance or shareholding. 

If a shareholder has paid the full amount owed for his stock previously, he will not be responsible for any further for the company’s debts. 

Nevertheless, the responsibility for sole ownership and association is infinite, and the latter is shared and multi-faceted in the latter situation.

4. Perpetual Existence: 

Unlike a corporation or single operating interest, the joint-stock company has a perpetual feature. 

Once an entity is created, it will operate until it is officially liquidated for an indefinite duration. In the case of the business, the slogan “men may come and men go but I go on forever”  But the demise of a sole trader concludes with a sole business issue and any members of the partnership must, in the case of merger, death, resignation or insolvency, split the firm.

5. Limited liability of shareholders: 

The responsibility of the owner reflects the disparity in a joint-stock company unlike other companies or a partnership. to pay the liability of the corporation, the properties belonging to the group owners can not be liquidated in a joint-stock company.

The liability of a creditor is restricted, and there is no position for the amount of debt here.

6. Common seal: 

Since a joint-stock company is an artificial legal entity, the board of directors controls its roles, meaning that approvals are common.

Standard seals are engraved and bear the name of the company, but the board of directors take its decisions. 

The only things that bind the organization to a contract are the standard seal and the signatures of the members.

7. Transferability of Shares:

In joint stock company representatives of a collective corporation shall be entitled to openly move their shares as provided for by the laws of the organization of the company.

The private company representatives do not, though, obtain this right.

8. Separation of Ownership from Management: 

In a joint-stock company the owners are held in a corporation, while the administration of the company’s operations is in the possession of the Management Board.

This is because a large group of owners distributed over a large area can not collaborate regularly for the corporation. Shareholders, therefore, appoint their representatives as managers to manage the affairs of the company.

9. A Large Number of Members: 

In a joint-stock company, the maximum number of members is not limited. Therefore, huge capital can be brought up.

Even an ordinary man can spend his money in a large company and benefit from it.

10. Distribution of Loss and profit:

There are large numbers of shareholders in a joint-stock company. A significant number of members are at risk for total losses and benefits in profits owing to a business.

Unlike a limited partner of a public company will accept a very small failure probability that is confined to its stock’s face value.

Let’s dive into some advantages and disadvantages of a joint stock company-


1. The main benefit of joint-stock corporations is the limited liability of all shareholders. 

2. The liability is restricted to the outstanding sum of your stock, which represents a major benefit. 

3. The shares are transferable from a joint-stock corporation. It ensures that if a person wishes to sell it on the market or in a public listing, he or she can do so and transform it into cash. 

4. The continuous succession of shared stocks can be perceived to be a great advantage because the assets can be exchanged. 

5. To manage all the activities, a company hires a board of directors. The Board is elected by highly qualified and talented people and this results in inefficient management. Furthermore, a company often has great resources, allowing them to employ the best talents and professionals. 

6. Joint-stock companies have huge budgets, and experts can be employed to carry out the activities associated with them.


1. The formation of a joint-stock company is a very long and time-consuming process.

2. It is a costly process and the main disadvantage of such enterprises. The usually long period lasts between a few weeks to a few months. 

3. The Company Act requires public records of all public companies. This implies a large lack of secrecy as the ownership of a joint-stock company is public. 

4. Joint stock firms comply with a variety of strict regulations and rules that greatly reduces their rights.There is also a restricted operation of joint-stock firms.

Now, let’s know how the joint stock company gets formed?

It happens mainly in 5 stages let’s get into details:


Promoting a company applies generally to all operations that have to be embarked on to set up a new business entity to produce or distribute some goods or services to the public.

It starts by conceiving a business idea or finding a possibility to do business,evaluating its feasibility and starting the business unit with the necessary steps.

The problem is whether or not all the basic requirements including property, building, raw materials, equipment, machinery, etc. are usable.

A promoter could be identified by an individual or group of individuals who think of a new business, determines its viability and takes the required steps to coordinate the basic requirements to create a business unit such as a company and put it in action.

He designs the concept of a business enterprise, analyzes the potential, establishes a tentative organizational model, gets the requisite people, equipment, machinery, and money together, and launches the firm.


To carry out its business without registering, a sole owner or partnership corporation may be formed.

Nevertheless,a corporation can not be founded or allowed to operate without registration.

In reality, only when registered with the Registrar of Companies a company comes into being. The promoter should take the following actions:

    a: Approval of Name: The name chosen for the organization will ensure that it does not suit any other company’s name. For this, the creator will fill in and forward to the Company Registrar the “Name Availability Form” together with the fees needed. At the top, the term will contain the

words ‘ Limited ‘ or ‘ private Limited. ‘When authorized, the promoter may continue with other incorporation formalities.

    b: Filing of Documents: Following the approval of the name, the promoter applies for registration 

to the Registrar of the Companies of the State in which the Registered Office of the company is located.

             The following documents must accompany the application for registration:

                 * Memorandum of Association (MOA)

                 * Articles of Association (AOA). 

                 * A list of members who have agreed to become Directors of the joint-stock company with their addresses etc.  

                 * Written consent of the proposed Directors to act in that capacity, duly signed by each Director. 

                 * A copy of the letter of authorization from the company registrar. 

    c: Payment of Filing and Registration Fees: The Registrar will also check all documents and if he finds them correctly he will issue a Certificate of Incorporation, which will be paid at the prescribed rate for a long term. The business is made available when the certificate is released.

So this certificate may be called as the Birth Certificate of a Joint Stock Company

Raising capital or subscription of capital:

After the company is incorporated, the next stage is to raise the necessary capital. 

In the case of a private limited company, funds are raised from the members or through arrangements from banks and other sources.

 In the case of a public limited company, the share capital has to be raised from the public. 

Commencement of business:

In case of a private limited company, it will automatically start its business as soon as it is registered. Nevertheless, 

in case of the public limited company a certificate, recognized as ‘ certificate of commencement of business’, must be received from the Registrar of 

Companies before starting their service. To that effect, a document shall be sent to the Registrar of Companies with the following declaration.

Now, this is the process to form a joint-stock company.

Let us know in the comment if you like the article or not.

Thanks for reading

Have a good day.

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How to register a company in India

How to register a company

How to register a company in India_ - IODED

Registration of a startup in India is a very frequently asked question by the new generation entrepreneurs. With a population of more than one billion and still growing, India is a great potential market for entrepreneurs. But for the entrepreneurs to tap this opportunity and make the most out of it, they should first register their company. It is very important to establish your company’s legal presence. The last thing you want is to get penalized over a legal mistake that you were not even aware of! If you are here to understand the process of how to register a company, then you are at the right place!


Obtain a Digital Signature Certificate (DSC)

Obtain a Director Identification Number (DIN)


Registration on the MCA portal

Obtain a certificate of Incorporation

1. Obtain a Digital Signature Certificate (DSC):

Step one is to apply for the digital signature of the directors, also known as DSC.

  • What is a Digital Signature Certificate?

A Digital Signature Certificate (DSC) is the digital equivalent of physical or paper certificates.

  • How to get a Digital Signature Certificate done?
  • Digital Signature Certificate (DSC) Applicants can directly approach Certifying Authorities (CAs) with original supporting documents, and self-attested copies will be sufficient in this case.
  • DSCs can also be obtained, wherever offered by CA, using Aadhar eKYC based authentication, and supporting documents are not required in this case.
  • A letter/certificate issued by a Bank containing the DSC applicant’s information as retained in the Bank database can be accepted. Such letter/certificate should be certified by the Bank Manager.
  • It normally takes 2 days to obtain DSC after submitting the documents. 

  • What are the documents required for DSC?

Identity Proof: (Any of the following documents)

  1. Passport
  2. PAN Card of the Applicant
  3. Driving License
  4. Post Office ID Card
  5. Bank Account Passbook containing the photograph and signed by an individual with attestation by the concerned Bank official
  6. Photo ID card issued by the Ministry of Home Affairs of Centre/State Governments
  7. Any Government issued photo ID card bearing the signatures of the individual

Address Proof: (Any of the following documents)

  1. AADHAAR Card
  2. Voter ID Card
  3. Driving License (DL)/Registration Certificate (RC)
  4. Water Bill (Not older than 3 Months).
  5. Electricity Bill (Not older than 3 Months)
  6. Latest Bank Statements signed by the bank (Not older than 3 Months)
  7. GST certificate
  8. Property Tax/ Corporation/ Municipal Corporation Receipt

  • Why is Digital Signature Certificate (DSC) required?

A digital signature can be presented electronically to prove one’s identity, to access information or services on the internet or to sign certain documents digitally. 

2. Obtain a Director Identification Number (DIN):

  • What is Director Identification Number?
  • Director Identification Number (DIN) is a unique 8-digit number that is allotted by Central Government to the individuals who intend to become a director in a company. 
  • DIN once allotted is valid for lifetime of a director until cancelled, surrendered or deactivated.
  • How to apply for DIN?
  1. SPICe Form:

Application of allotment of DIN’s to the proposed first directors in respect of new companies

      shall be made in SPICe Form.

  1. DIR-3 Form:

Any person intending to become a director in an already existing company shall have to make

an application in eForm DIR-3 for allotment of DIN.

  1. DIR-6 Form:

Any changes in the particulars of the directors shall be filed in form DIR-6.

To apply for DIN, the above forms are to be filed electronically. It has to be digitally signed

and then uploaded on the MCA21 portal.

3. Registration on the MCA Portal:

  1. Open your internet browser. (Google chrome, Internet explorer)
  2. Open the MCA website. ( http://www.mca.gov.in/ )
  3. At the top cetre
  4. , there is a register option as shown in the image below.
  1. Click on “Register” and the Registration tab will open.
  1. Fill all the details in the Registration form and your registration on the MCA portal is complete. The Registration form will look like the image attached below.

Registration form 

Registration form (Contd..)

4. Obtain a certificate of incorporation:

  • What is certificate of incorporation?

A certificate of incorporation is a legal document relating to the formation of a company or a corporation.

  • What information is required to prepare a Certificate of Incorporation?

A basic certificate of incorporation usually includes:

  • Name of the state
  • Business code where the entity is organized
  • Company name
  • Company legal address
  • Registered Agent name and address
  • Registered agent consent of appointment
  • Quantity of authorized shares of stock
  • Value of the shares of stock
  • Main purpose of the business
  • Name and address of the initial board of directors
  • Name and address of the Incorporator
  • Date
  • Signature of the Incorporator
  • How many days does it take to get the Certificate of Incorporation?

It takes about 8-10 working days to get the Certificate of Incorporation.

Once the RoC issues your Certificate of Incorporation, you are ready to start conducting business in India and start your journey as an entrepreneur in the diverse market of India!

So, what have you decided? What business are you planning to start? Let us know in the comments and we could help you with the digital marketing aspect of it!

How to Start A Startup in Bangalore?

How to start a startup in Bangalore_ - IODED

Why join the navy if you can be a pirate? Bangalore, the Silicon Valley of India, is known for fulfilling the dreams of new entrepreneurs. The IT hub has several opportunities for passionate entrepreneurs to kick start and run their enterprise. The startup policy launched by the Karnataka government aims to help and support startups to reach their full potential. With increasing opportunities and good support from the government, entrepreneurs can build strong business models that can significantly contribute to the economic development of our country.  

With such golden opportunities, entrepreneurs can start their start up journey from a city like Bangalore. However, many people don’t become entrepreneurs because they don’t know how to start a startup. This article will help you answer all your queries related to starting a startup, registration process and workspace selection.

Table of Content

1. Get an idea.
2. Understand the potential.
3. Collect the resources.
4. Register a company.
5. Select a workplace.

How to Start a Startup in Bangalore?

1.) Get an idea:

Ideas are the lifeblood of a business. Most successful startups always become big because of a good idea and not because of surplus funds.

What is a business idea?

A business idea is a concept that can be used for financial and commercial gain. It typically centers around selling a product or service that can be sold for money in return. An idea is like the brain of a business. Right ideas implemented at the right time can lead to a very profitable business.

How to get a business idea?

You want to start a business? Awesome. There is no textbook answer to this question. But here are some tips:

  • Identify your biggest source of satisfaction:

I know it’s cliché but find something you love to do. Choose a job you love and you will never have to work a day in your life.

  • Identify your frustration: 

Don’t just lock yourself in a room trying to come up with an idea no one has ever thought of. Instead, live your life and find something that bothers you. Then, figure out how to fix that problem, and you have a business.

  • Think about the world’s biggest problems – (15 – 20 years from now):



People like Elon Musk and Richard Branson are forward thinking innovators. They brainstormed the solutions to future problems. This could help you think with a new perspective for getting new and innovative ideas.

2.) Understand the potential:

Potential markets are the most important part of a startup’s future growth. A potential market is a large group of consumers who have shown some level of interest in buying a particular product or service. It is essential to identify the potential market. To do this, you must look for people who are a certain age, certain gender, certain demography and then examine their needs. Understanding the potential market proves that you have a future. Once you’ve identified a potential market, the key element will be to get the right message to the right person at the right time. 


3.) Collect the resources:

  • Select a Name and Legal structure.

There are 5 choices while selecting a legal structure:

  • Sole Proprietorship
  • Partnership
  • One Person Company
  • Private limited company
  • Public limited company

  • Register a domain name for your startup’s website:

You can use platforms like Go Daddy, Big Rock or Hosting Raja to purchase a domain name.

(Can provide link for How to register a domain name for Startups)

  • Obtain a registration with ROC and GST.

  • Open a company bank account.

  • Lease office, Warehouse or Retail space.
  • Obtain licenses and Permits.

  • Hire employees (If required)

(Can provide link of People every startup needs with another article)

  • Obtain business insurance.

  • Start Marketing:

Use Social Media platforms like Facebook, Instagram, LinkedIn, Twitter and Snapchat to promote your company. You can also market the company using Search Engine Optimization (SEO), Email marketing, Google Ads, Facebook ads, LinkedIn ads and YouTube ads if there is more budget. 

(Can provide link of How digital marketing helps in the growth of a startup)

4.) Register a Company:

Now that you have selected all the schemes, you must be confused about the registration process. Well, Relax. The process has become very easy nowadays. You can register and start a startup company within 7 – 15 working days. All you have to do is fill some forms and get some signatures. 

(Can provide link of How to register a startup company)


5.) Select a workplace:

Selection of workplace is taken for granted by many people. But it is a very important element. 

There are many researches which prove a correlation between the quality of a workplace and the productivity of an employee. A startup can either use a coworking space or lease a serviced office. This depends on the space needs and budget. If you have a flexible budget and you need very less working space, then coworking space is the right choice for you. However, if you need an office space that is large, then a serviced office is the right choice for you.

An entrepreneur often wonders How to start a startup because of the numerous challenges it brings. It could be monetary and non-monetary challenges, quitting a regular job or coming up with new ideas. However, Success and growth only come through continuous effort and hard work. There are many Indian startups that have overcome all these challenges and are internationally recognized as of today. Some of the startups that we can take inspiration from are Flipkart, Ola cabs, OYO rooms, Cure fit, Paytm and Zomato.

Well, now that you know how to start a startup, you can start working on your dreams, Make your life a dream and dream a reality. Make sure you keep in mind all these suggestions to overcome the initial challenges that most entrepreneurs have. 

You must also read – 

10 Important Things To Consider Before Starting A Startup