Can a company itself apply for insolvency under Section 10 of the IBC?

Question

My company can no longer pay its debts and the board wants to voluntarily start insolvency proceedings. Is this possible under Section 10? What I am unsure about is the procedure — where the application goes, what it costs, and how long section 10 ibc corporate debtor matters usually take. A plain explanation of the steps, in order, would help more than a general answer.

MyVakeel Legal Desk · Accepted Answer

The law that applies to section 10 ibc corporate debtor here is Insolvency and Bankruptcy Code 2016, Section 10, Insolvency and Bankruptcy Code 2016, Section 14 and Insolvency and Bankruptcy Code 2016, Section 29A. The detail below matters, because Insolvency and Bankruptcy Code 2016, Section 10 draws the line differently depending on what your documents show.

Section 10 permits a corporate debtor itself, through a special resolution of shareholders or a resolution of partners, to file an application before the NCLT to initiate the corporate insolvency resolution process when it has committed a default.

The application must be accompanied by the company's books of account, information on financial and operational creditors, and the name of the proposed interim resolution professional.

Once admitted, the same moratorium under Section 14 applies as in creditor-initiated proceedings, protecting the company's assets from recovery actions while a resolution plan is worked out.

Promoters and connected persons should be aware that Section 29A bars certain categories of persons, including undischarged insolvents, wilful defaulters and those convicted of specified offences, from submitting a resolution plan or regaining control of the company.

Filing under Section 10 does not guarantee the promoters will retain management, since a resolution professional and the committee of creditors take over control of the company's affairs during the process.

Practical steps: 1) Pass the requisite special resolution or partners' resolution authorising the Section 10 filing; 2) Prepare the books of account, creditor list and proposed interim resolution professional's consent; 3) File the application before the NCLT bench with jurisdiction over the registered office; 4) Take legal advice on Section 29A exposure before or during the process.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — remedies under Insolvency and Bankruptcy Code 2016, Section 10 carry limitation periods, and unexplained delay weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in corporate law.