The objective of the Insolvency and Bankruptcy Code is to consolidate and amend the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner. An effective legal framework for timely resolution of insolvency and bankruptcy will not only encourage entrepreneurship but will also improve Ease of Doing Business and facilitate more investments leading to higher economic growth and development.

India’s Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) has significantly reformed the country’s insolvency regime by introducing a structured, time-bound, and creditor-driven resolution process. However, when compared to global insolvency frameworks, particularly Chapter 11 of the U.S. Bankruptcy Code and Administration under the UK Insolvency Act, 1986, key differences in approach and effectiveness emerge.

The U.S. model is debtor-in-possession, allowing companies to retain control during restructuring, fostering business continuity and flexibility in resolution plans. In contrast, CIRP follows a creditor-in-control model, where management is displaced and replaced by a Resolution Professional (RP), ensuring transparency but sometimes limiting restructuring agility. The UK administration process, while creditor-focused, provides greater flexibility through mechanisms like pre-pack administration, which is still evolving in India.