The Companies Act for Insolvency Professionals
The Code took over insolvency and rewrote the Companies Act around it. These are the points where the two meet.
The Insolvency and Bankruptcy Code did not replace the Companies Act, 2013. It took over one job, insolvency, and rewrote the Companies Act around that change through its Eleventh Schedule. An insolvency professional therefore works inside both statutes at once: the Code decides the process, and the Companies Act still governs charges, schemes, strike-off and the company's own records.
The Limited Insolvency Examination tests 13 named chapters of the Companies Act under Business Laws, and the business and general laws case study carries 8 marks. As with every law on the syllabus, the version tested is the one in force on 4 February 2025.
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Where the Companies Act and the Code Meet
Each row is a Companies Act provision the Code's Eleventh Schedule amended or that an IP uses during a process.
| Provision | What it does in an insolvency |
|---|---|
| Section 2(94A) | "Winding up" means winding up under the Companies Act or liquidation under the Code, as applicable. |
| Section 271 | Grounds for winding up by the Tribunal. Inability to pay debts is no longer one of them: a company that cannot pay its debts goes to the Code, not to a winding-up petition. |
| Section 434(1)(c), proviso | A party to a winding-up proceeding pending before a court when the 2018 Ordinance began may apply to transfer it to the NCLT, where it is treated as an application to start CIRP. |
| Section 230(1) and (6) | A compromise or arrangement may be proposed by a liquidator appointed under the Companies Act or the Code. |
| Section 77(3) | A charge that is not registered is not taken into account by a liquidator appointed under the Companies Act or the Code. |
| Section 249(1)(e) | The Registrar cannot strike off a company that is being wound up under Chapter XX or under the Code. |
| Section 275(2) | Even a Companies Act winding up uses an insolvency professional: the Tribunal appoints the provisional or Company Liquidator from registered IPs. |
| Section 327(7) | The Companies Act's preferential payment rules in sections 326 and 327 do not apply to a liquidation under the Code. Section 53 of the Code governs that waterfall instead. |
A Section 230 Scheme Inside a Liquidation
Regulation 2B of the Liquidation Process Regulations lets a company in liquidation be saved through a Companies Act scheme. The sequence, as the regulation stands in October 2026:
- 1
CoC recommends exploring a scheme
The liquidator files a proposal only where the committee of creditors has recommended it under regulation 39BA of the CIRP Regulations.
- 2
Filing within 30 days
The liquidator cannot file the proposal after 30 days from the liquidation commencement date.
- 3
Section 29A screen
A person not eligible to submit a resolution plan under the Code cannot be a party to the compromise or arrangement in any manner.
- 4
Majority and value test (from 2 June 2026)
The scheme must be approved by the creditor majority section 230(6) requires, and creditors must get more under it than the liquidation value determined as on the insolvency commencement date.
- 5
Completion within 90 days
The scheme must be completed within 90 days of the liquidation order. That time, up to 90 days, is excluded from the liquidation period.
Cut-off Trap: The 2026 Scheme Conditions
The majority-and-value condition in regulation 2B was inserted with effect from 2 June 2026, after the exam's law cut-off of 4 February 2025. For the exam, apply the 30-day filing rule, the section 29A bar and the 90-day completion limit, without the 2026 condition.
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Companies Act Chapters an IP Uses Most
All 13 chapters on the syllabus matter, but these come up in case studies because a process touches them directly.
- check_circleChapter VI, registration of charges: whether a secured creditor's charge was registered decides how the liquidator treats it.
- check_circleChapter VII, management and administration: statutory registers and returns the IRP takes control of on day one.
- check_circleChapter IX, accounts: the audited financial statements that feed the information memorandum.
- check_circleChapter XV, compromises and arrangements: section 230 schemes, including inside liquidation.
- check_circleChapter XVIII, removal of names: why a company under the Code cannot be struck off.
- check_circleChapter XX, winding up: the residual Tribunal winding up on grounds other than inability to pay debts.
- check_circleChapter XXVII, NCLT and NCLAT: the same Tribunal sits as the Adjudicating Authority under the Code.
How the Limited Insolvency Examination Tests This
Expect two kinds of question. A one-mark MCQ asks which forum or route applies: a creditor wants to file a winding-up petition because the company has not paid a ₹1.2 crore invoice, and the right answer is that inability to pay debts is no longer a section 271 ground, so the route is the Code.
In the business and general laws case study, the facts mix both statutes. A liquidator finds a lender's charge was never registered with the Registrar, or a promoter caught by section 29A wants to back a section 230 scheme. The trap is answering from the Companies Act alone, when the Code or a regulation under it has changed the outcome.
FAQs
Can a company still be wound up under the Companies Act after the IBC?expand_more
Yes, but only on the grounds left in section 271, such as a special resolution, acts against the sovereignty or security of India, fraud, or just and equitable grounds. Inability to pay debts was removed as a ground by the Code's Eleventh Schedule.
Can a section 230 scheme be proposed during liquidation under IBC?expand_more
Yes. Section 230 allows a liquidator appointed under the Code to propose one. Regulation 2B of the Liquidation Process Regulations requires a CoC recommendation, filing within 30 days of the liquidation commencement date, and completion within 90 days of the liquidation order.
What happens to an unregistered charge in IBC liquidation?expand_more
Section 77(3) of the Companies Act, as amended by the Code, provides that a charge not duly registered is not taken into account by the liquidator, whether appointed under the Companies Act or the Code.
Which Companies Act chapters are in the IBBI exam syllabus?expand_more
Chapters III, IV, V, VI, VII, IX, XV, XVII, XVIII, XX, XXVII, XXVIII and XXIX, as listed in IBBI's syllabus dated 4 February 2025.
Next steps
- Liquidation Processarrow_forward
- Contract & Guaranteearrow_forward
- Section 29Aarrow_forward
- Syllabusarrow_forward
65 questions, case-study format, negative marking.