The Ministry of Corporate Affairs vide Notification dated 15th November 2019, has notified rules for corporate insolvency resolution process in respect of guarantors of corporate debtors, called The Insolvency and Bankruptcy (Application to Adjudicating Authority for Insolvency Resolution Process for Personal Guarantors to Corporate Debtors) Rules, 2019, which shall be in force from 1st December 2019.
Key Highlights from the Rules:
- The guarantor shall submit an application in Form A, for initiating the insolvency process, with an application fee of Rs. 2000/- , and the guarantor shall serve forthwith a copy of the application to every financial creditor and the corporate debtor for whom the guarantor is a personal guarantor.
- The creditor shall serve a demand notice on the guarantor demanding payment of the amount of default in Form B and application in Form C along with an application fee of Rs. 2000/-. A copy of Form C shall be served to guarantor and debtor.
- The Applicant shall provide a copy of the above application to the resolution professional within 3 days of his appointment.
- The Adjudicating Authority may permit withdrawal of the above application, before or after its admission on a request made by the applicant.
- The provisions also provide for appointment of insolvency professionals from the panel maintained by the board.
Click here to read the Notification.
