Tag: IBC 2016

Management Notes

Committee of Creditors (CoC), Constitution, Composition, Functions, Role, Rights, Responsibilities

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The Committee of Creditors (CoC) is the principal decision making body constituted during the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). It is formed by the Interim Resolution Professional (IRP) after verifying the claims of creditors and mainly consists of the financial creditors of the corporate debtor. The CoC plays a crucial role in supervising the insolvency process, appointing or replacing the Resolution Professional (RP), evaluating and approving resolution plans, and deciding whether the corporate debtor should be revived or liquidated. Through its commercial decisions, the CoC protects creditors’ interests, promotes transparency, ensures timely resolution of insolvency, and contributes to the effective implementation of the Insolvency and Bankruptcy Code.

Constitution of CoC:

The Committee of Creditors (CoC) is constituted under Section 21 of the Insolvency and Bankruptcy Code, 2016 (IBC) after the commencement of the Corporate Insolvency Resolution Process (CIRP). The Interim Resolution Professional (IRP) is responsible for collecting, verifying, and admitting the claims submitted by creditors. Based on the verified claims, the IRP constitutes the CoC.

The CoC primarily consists of the financial creditors of the corporate debtor. Each financial creditor is entitled to voting rights in proportion to the amount of its admitted financial debt. If a financial creditor is a related party of the corporate debtor, it generally does not have the right to participate or vote in the CoC, except where permitted under the Code.

Where a corporate debtor has no financial creditors, the Committee is constituted in the manner prescribed under the Insolvency and Bankruptcy Board of India (IBBI) Regulations, and may include operational creditors or their representatives. After its constitution, the CoC holds its first meeting, where it may confirm the Interim Resolution Professional (IRP) as the Resolution Professional (RP) or appoint another eligible insolvency professional.

The Committee of Creditors is the principal decision making body during the CIRP. It supervises the insolvency process, evaluates and approves resolution plans, and decides whether the corporate debtor should be revived or liquidated. Its decisions are taken through the prescribed voting majority under the Insolvency and Bankruptcy Code, 2016, ensuring transparency, fairness, and effective resolution of corporate insolvency.

Composition of CoC:

1. Financial Creditors

The Committee of Creditors (CoC) primarily consists of the financial creditors of the corporate debtor. These include banks, financial institutions, debenture holders, and other lenders who have provided financial debt. They are the principal members of the CoC and exercise voting rights according to their admitted claims.

2. Interim Resolution Professional (IRP)

The Interim Resolution Professional (IRP) constitutes the CoC after verifying creditors’ claims. Although the IRP convenes and conducts the initial meetings of the CoC, the IRP is not a voting member. The IRP acts as the facilitator until a Resolution Professional (RP) is appointed or confirmed.

3. Resolution Professional (RP)

After appointment, the Resolution Professional (RP) manages the meetings and proceedings of the CoC. The RP provides information, places resolution plans before the Committee, and implements its decisions. However, the RP is not a member of the CoC and has no voting rights.

4. Operational Creditors (Special Cases)

Operational creditors are generally not members of the CoC. However, where there are no financial creditors, operational creditors or their representatives may become part of the Committee in accordance with the Insolvency and Bankruptcy Code, 2016 and the applicable regulations.

Functions of CoC:

1. Appointment of Resolution Professional

One of the primary functions of the Committee of Creditors (CoC) is to confirm the Interim Resolution Professional (IRP) as the Resolution Professional (RP) or appoint another eligible insolvency professional. The RP manages the Corporate Insolvency Resolution Process (CIRP), conducts meetings, verifies claims, and performs duties under the Insolvency and Bankruptcy Code, 2016. This function ensures professional and efficient management of the insolvency process.

2. Evaluation of Resolution Plans

The CoC examines the resolution plans submitted by eligible resolution applicants. It evaluates each plan based on feasibility, viability, financial capability, and compliance with the Insolvency and Bankruptcy Code, 2016. The Committee ensures that the proposed plan maximizes the value of the corporate debtor’s assets and protects the interests of creditors and other stakeholders before taking a decision.

3. Approval of Resolution Plan

The CoC has the authority to approve the most suitable resolution plan through the prescribed voting majority under the Insolvency and Bankruptcy Code, 2016. Once approved, the plan is submitted to the National Company Law Tribunal (NCLT) for final approval. This function enables the revival of financially viable companies while ensuring fair treatment of creditors and stakeholders.

4. Supervision of CIRP

The CoC supervises the entire Corporate Insolvency Resolution Process (CIRP) and monitors the performance of the Resolution Professional (RP). It reviews the progress of the insolvency proceedings, considers important decisions, and provides necessary directions wherever required. Effective supervision ensures transparency, accountability, and timely completion of the insolvency resolution process.

5. Decision on Liquidation

If no viable resolution plan is available or if the proposed plans are not acceptable, the CoC may decide to recommend the liquidation of the corporate debtor. The recommendation is submitted to the National Company Law Tribunal (NCLT) for appropriate orders. This function ensures that non viable companies are liquidated in an orderly manner while protecting the interests of creditors.

6. Protection of Creditors’ Interests

The CoC represents the collective interests of the financial creditors during the insolvency process. It takes commercial decisions that aim to maximize debt recovery, preserve the value of assets, and ensure fair treatment of all creditors. By actively participating in CIRP, the Committee safeguards creditors’ rights and strengthens confidence in the insolvency framework.

7. Approval of Important Decisions

The Resolution Professional (RP) must obtain the approval of the CoC before taking several important actions, such as raising interim finance, creating security interests, selling significant assets, or making major business decisions. This function ensures that critical decisions are taken collectively, transparently, and in the best interests of the creditors and the corporate debtor.

8. Ensuring Time Bound Resolution

The CoC plays an important role in ensuring that the Corporate Insolvency Resolution Process (CIRP) is completed within the timelines prescribed under the Insolvency and Bankruptcy Code, 2016. By conducting meetings regularly, evaluating resolution plans promptly, and making timely decisions, the Committee helps achieve speedy resolution, preserve business value, and reduce unnecessary delays in insolvency proceedings.

Role of CoC in Corporate Insolvency Resolution Process (CIRP):

1. Appointment of Resolution Professional

The Committee of Creditors (CoC) plays an important role in appointing the Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP). In its first meeting, the CoC may confirm the Interim Resolution Professional (IRP) as the RP or appoint another qualified insolvency professional. The RP manages the affairs of the corporate debtor, conducts the CIRP, verifies creditors’ claims, and performs duties under the Insolvency and Bankruptcy Code, 2016. This role ensures professional, transparent, and efficient management of the insolvency process.

2. Evaluation of Resolution Plans

The CoC carefully evaluates the resolution plans submitted by eligible resolution applicants. It examines whether the plans are feasible, financially viable, and compliant with the provisions of the Insolvency and Bankruptcy Code, 2016. The Committee compares different proposals to determine which plan offers the best opportunity for reviving the corporate debtor while maximizing the value of its assets. Proper evaluation helps ensure fair treatment of creditors and improves the chances of successful business revival.

3. Approval of Resolution Plan

The CoC has the authority to approve the most suitable resolution plan through the prescribed voting majority under the Insolvency and Bankruptcy Code, 2016. After approval, the plan is submitted to the National Company Law Tribunal (NCLT) for confirmation. Once approved by the Tribunal, the plan becomes binding on the corporate debtor, creditors, employees, and other stakeholders. This role enables the successful restructuring and continuation of financially viable companies.

4. Supervision of the Resolution Professional

The CoC continuously supervises the work of the Resolution Professional (RP) throughout the CIRP. It reviews the progress of insolvency proceedings, monitors the management of the corporate debtor, and ensures that the RP performs duties in accordance with the Insolvency and Bankruptcy Code, 2016. The Committee may also provide necessary directions and seek information regarding important decisions. This supervision ensures transparency, accountability, and proper implementation of the insolvency process.

5. Approval of Major Business Decisions

During the CIRP, the Resolution Professional (RP) must obtain the approval of the CoC before taking important commercial decisions such as raising interim finance, creating security interests, selling significant assets, or making major operational changes. This role ensures that significant decisions affecting the corporate debtor are taken collectively by the financial creditors. It protects creditors’ interests and promotes responsible management during the insolvency process.

6. Decision on Liquidation

If no feasible resolution plan is approved within the prescribed period or if revival of the corporate debtor is not possible, the CoC may decide to recommend liquidation. The recommendation is submitted to the National Company Law Tribunal (NCLT), which may pass an order for liquidation under the Insolvency and Bankruptcy Code, 2016. This role ensures that non viable companies are closed in an orderly manner and that the assets are distributed according to the statutory priority.

7. Protection of Creditors’ Interests

The CoC represents the collective interests of the financial creditors throughout the CIRP. It takes commercial decisions aimed at maximizing debt recovery, preserving the value of the corporate debtor’s assets, and ensuring equitable treatment of creditors. By actively participating in the insolvency process, the Committee protects creditors’ rights while supporting the objective of achieving an efficient and fair resolution under the Insolvency and Bankruptcy Code, 2016.

8. Ensuring Time Bound Resolution

The CoC plays a crucial role in ensuring that the Corporate Insolvency Resolution Process (CIRP) is completed within the timelines prescribed under the Insolvency and Bankruptcy Code, 2016. It conducts regular meetings, evaluates resolution plans without unnecessary delay, and makes timely commercial decisions. Prompt action by the Committee helps preserve the value of the corporate debtor, improves recovery for creditors, and fulfills the objective of a speedy and efficient insolvency resolution process.

Rights, Responsibilities of CoC:

1. Right to Appoint or Replace the Resolution Professional

The Committee of Creditors (CoC) has the right to confirm the Interim Resolution Professional (IRP) as the Resolution Professional (RP) or replace the IRP with another eligible insolvency professional. This right enables the CoC to ensure that the insolvency process is managed by a competent and independent professional. By selecting an appropriate RP, the Committee safeguards the interests of creditors and promotes efficient implementation of the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

2. Right to Approve or Reject Resolution Plans

The CoC has the exclusive right to examine, approve, or reject resolution plans submitted by eligible resolution applicants. The Committee evaluates the feasibility, viability, and compliance of each plan with the Insolvency and Bankruptcy Code, 2016. Only the resolution plan approved by the required voting majority is forwarded to the National Company Law Tribunal (NCLT) for final approval. This right enables creditors to make commercial decisions regarding the future of the corporate debtor.

3. Right to Seek Information

The CoC has the right to obtain all necessary financial, operational, and legal information relating to the corporate debtor from the Resolution Professional (RP). The Committee may seek explanations, reports, financial statements, and other relevant documents required for informed decision making. Access to complete and accurate information enables the CoC to evaluate resolution plans effectively and monitor the progress of the insolvency process.

4. Right to Decide on Liquidation

If no suitable resolution plan is available or the revival of the corporate debtor is not feasible, the CoC has the right to decide that the company should be liquidated. The decision is taken through the prescribed voting majority and submitted to the National Company Law Tribunal (NCLT) for appropriate orders. This right ensures that non viable companies are closed in an orderly manner while maximizing recovery for creditors.

5. Responsibility to Protect Creditors’ Interests

The CoC is responsible for safeguarding the collective interests of all financial creditors during the Corporate Insolvency Resolution Process (CIRP). It must take commercial decisions that maximize debt recovery, preserve the value of the corporate debtor’s assets, and ensure fair treatment of creditors. Responsible decision making enhances confidence in the insolvency framework and supports the objectives of the Insolvency and Bankruptcy Code, 2016.

6. Responsibility to Ensure Fair Evaluation

The CoC is responsible for evaluating all resolution plans fairly, objectively, and without discrimination. It should assess the financial viability, feasibility, and legal compliance of every proposal before making a decision. The Committee must act in the best interests of all stakeholders rather than favoring any particular applicant. Fair evaluation promotes transparency, accountability, and successful resolution of the corporate debtor.

7. Responsibility to Complete CIRP Timely

The CoC must ensure that the Corporate Insolvency Resolution Process (CIRP) is completed within the timelines prescribed under the Insolvency and Bankruptcy Code, 2016. It should conduct meetings regularly, take prompt commercial decisions, and avoid unnecessary delays in evaluating resolution plans. Timely completion preserves the value of the corporate debtor’s assets, improves recovery for creditors, and fulfills the objectives of the insolvency framework.

8. Responsibility to Act Transparently

The CoC has the responsibility to conduct its meetings and decision making process with transparency, fairness, and accountability. Decisions should be based on commercial considerations and comply with the provisions of the Insolvency and Bankruptcy Code, 2016. Maintaining proper records, following legal procedures, and acting impartially strengthen stakeholder confidence and ensure the credibility of the insolvency resolution process.

Management Notes

Insolvency and Bankruptcy code 2016, Objective, Applicability and Process

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Insolvency and Bankruptcy Code (IBC), 2016 is a comprehensive law introduced in India to address issues of insolvency and bankruptcy in a time-bound and efficient manner. Prior to the IBC, India lacked a uniform legal framework to address corporate insolvency, leading to delayed and often ineffective resolutions. The IBC aims to provide a structured process for resolving corporate insolvency, improving the ease of doing business, and enhancing the credit culture in India.

Background of the Insolvency and Bankruptcy Code, 2016:

Before the enactment of the Insolvency and Bankruptcy Code (IBC), 2016, India’s insolvency framework was governed by multiple laws, including the Companies Act, 2013, the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI Act), and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act). The existence of several overlapping laws and authorities resulted in delays, inconsistent decisions, and low recovery rates for creditors.

To address these challenges, the Bankruptcy Law Reforms Committee (BLRC), chaired by T. K. Viswanathan, recommended a comprehensive insolvency law. Based on these recommendations, the Insolvency and Bankruptcy Code, 2016 was enacted to provide a single, consolidated legal framework for resolving insolvency and bankruptcy matters relating to companies, limited liability partnerships, partnership firms, and individuals.

The Code introduced a time bound insolvency resolution process, maximized the value of assets, promoted entrepreneurship, improved the availability of credit, and balanced the interests of creditors and debtors. It also established the Insolvency and Bankruptcy Board of India (IBBI) as the regulatory authority and assigned the National Company Law Tribunal (NCLT) as the adjudicating authority for corporate insolvency matters. The Code has significantly strengthened India’s insolvency regime by improving recovery mechanisms, reducing delays, enhancing investor confidence, and promoting ease of doing business.

Objective of the Insolvency and Bankruptcy Code, 2016

  • Time Bound Resolution

One of the primary objectives of the Insolvency and Bankruptcy Code, 2016 (IBC) is to ensure a time bound insolvency resolution process. The Code prescribes strict timelines for completing insolvency proceedings, thereby reducing unnecessary delays and uncertainty. Quick resolution helps preserve the value of the debtor’s assets, enables faster recovery for creditors, and improves business continuity. A time bound mechanism also strengthens confidence in the insolvency system and promotes efficient corporate governance.

  • Maximization of Asset Value

The IBC aims to maximize the value of the assets of financially distressed entities. By resolving insolvency at an early stage, the Code prevents unnecessary deterioration of business assets and encourages their productive use. Maximizing asset value benefits creditors, shareholders, employees, and other stakeholders by improving recovery and preserving viable businesses. This objective supports economic growth and efficient utilization of resources.

  • Balancing the Interests of Stakeholders

The Code seeks to balance the interests of creditors, debtors, employees, shareholders, government authorities, and other stakeholders. It provides a fair and transparent process for resolving insolvency while ensuring equitable treatment of all concerned parties. By protecting the legitimate rights of different stakeholders, the IBC promotes confidence in the insolvency framework and encourages responsible business practices.

  • Promoting Entrepreneurship

The IBC encourages entrepreneurship by providing an effective mechanism for resolving business failures. Entrepreneurs can take business risks knowing that a structured legal process exists to deal with financial distress. The Code promotes responsible risk taking, facilitates business restructuring, and allows viable enterprises to continue operations. This contributes to innovation, economic development, and a healthy business environment.

  • Improving Credit Availability

An important objective of the IBC is to improve the availability of credit in the economy. A strong insolvency framework gives confidence to banks and financial institutions that debts can be recovered efficiently in case of default. Increased confidence encourages lending, reduces credit risk, and supports business expansion. This strengthens the financial system and contributes to overall economic growth.

  • Protecting Creditors’ Rights

The IBC provides a legal framework for protecting the rights of financial and operational creditors. It ensures that creditors participate in the insolvency resolution process through the Committee of Creditors (CoC) and have a significant role in approving resolution plans. Protecting creditors’ interests improves recovery rates, reduces bad debts, and enhances confidence in the financial and banking sectors.

  • Reducing Non Performing Assets (NPAs)

The IBC helps reduce Non Performing Assets (NPAs) by providing an efficient mechanism for resolving stressed assets and recovering dues. Timely insolvency proceedings encourage borrowers to resolve defaults quickly and discourage wilful non payment. Lower NPAs strengthen the banking system, improve financial stability, and enable banks to provide more credit for productive economic activities.

  • Consolidating Insolvency Laws

Before the enactment of the IBC, insolvency matters were governed by multiple laws, leading to delays and inconsistencies. One of the major objectives of the Code is to provide a single, comprehensive legal framework for insolvency and bankruptcy. This consolidation simplifies the legal process, removes overlapping provisions, improves efficiency, and creates greater certainty for businesses, creditors, and investors.

  • Enhancing Ease of Doing Business

The IBC contributes to ease of doing business by creating a transparent, predictable, and efficient insolvency system. Investors and businesses are more willing to invest when an effective legal mechanism exists for resolving financial distress. A strong insolvency framework improves investor confidence, supports economic growth, and enhances India’s reputation as a business friendly destination.

  • Promoting Economic Growth

The ultimate objective of the IBC is to promote sustainable economic growth by ensuring efficient resolution of insolvency, protecting viable businesses, improving recovery of debts, and strengthening the financial system. An effective insolvency framework encourages investment, supports industrial development, improves credit flow, and enhances overall economic stability. The Code plays a significant role in creating a healthy and competitive business environment in India.

Applicability of the Insolvency and Bankruptcy Code, 2016

1. Companies

The Insolvency and Bankruptcy Code, 2016 (IBC) applies to all companies incorporated under the Companies Act, 2013 and previous company laws. If a company defaults in repayment of its debts, insolvency proceedings may be initiated under the Code before the National Company Law Tribunal (NCLT). The IBC provides a time bound process for resolving insolvency, protecting creditors’ interests, and maximizing the value of the company’s assets. This applicability ensures that financially distressed companies are either successfully revived or liquidated in an orderly and efficient manner.

2. Limited Liability Partnerships (LLPs)

The IBC applies to Limited Liability Partnerships (LLPs) registered under the Limited Liability Partnership Act, 2008. When an LLP commits a default in repayment of its financial obligations, insolvency proceedings may be initiated before the National Company Law Tribunal (NCLT). The Code provides a structured mechanism for resolving financial distress, protecting creditors, and preserving the value of the LLP’s assets. This enables financially viable LLPs to continue operations while ensuring fair treatment of all stakeholders.

3. Partnership Firms

The Code extends to partnership firms for insolvency and bankruptcy matters as provided under its relevant provisions. It offers a legal framework for dealing with the financial failure of partnership businesses and provides procedures for the settlement of debts and distribution of assets. The objective is to ensure an orderly resolution process that protects the interests of creditors and debtors while promoting financial discipline and business stability.

4. Individuals

The Insolvency and Bankruptcy Code, 2016 also applies to individuals, including personal guarantors to corporate debtors, subject to the provisions notified by the Central Government. The Code provides procedures for insolvency resolution and bankruptcy of individuals who are unable to repay their debts. It aims to balance the interests of debtors and creditors while providing eligible individuals with an opportunity for financial rehabilitation through a structured legal process.

5. Personal Guarantors to Corporate Debtors

The IBC specifically applies to personal guarantors of corporate debtors. If a personal guarantor defaults on obligations arising from a guarantee given for the debts of a corporate debtor, insolvency proceedings may be initiated before the National Company Law Tribunal (NCLT). This provision ensures coordinated resolution of both the corporate debtor and its guarantor, improves debt recovery, and strengthens the overall insolvency framework.

6. Financial and Operational Creditors

The provisions of the IBC are available to both financial creditors and operational creditors for initiating insolvency proceedings upon default. Financial creditors include banks and financial institutions that provide loans, while operational creditors include suppliers of goods and services, employees, and statutory authorities. The Code provides these creditors with an effective legal remedy for recovery while ensuring a fair and transparent insolvency resolution process.

7. Corporate Debtors

The IBC applies to every corporate debtor that has committed a default in repayment of its financial obligations. A corporate debtor is a company or LLP that owes a debt to one or more creditors. Once a default occurs, insolvency proceedings may be initiated by eligible applicants before the National Company Law Tribunal (NCLT). The Code seeks to resolve financial distress through restructuring or, where necessary, liquidation of the corporate debtor.

8. Government Notified Entities

The Central Government may notify additional categories of persons or entities to which the Insolvency and Bankruptcy Code, 2016 shall apply. This flexibility allows the Government to extend the provisions of the Code to new classes of debtors as required. Such notifications ensure that the insolvency framework remains adaptable to changing economic conditions while promoting efficient debt resolution and financial stability.

Process of the Insolvency and Bankruptcy Code, 2016:

Step 1. Filing of Insolvency Application

The insolvency process begins when a financial creditor, operational creditor, or the corporate debtor files an application before the National Company Law Tribunal (NCLT) after the occurrence of a default. The application must contain the prescribed documents and evidence of default. The purpose of filing the application is to initiate the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016. This step formally commences the legal proceedings for resolving the financial distress of the corporate debtor.

Step 2. Admission of Application by NCLT

The National Company Law Tribunal (NCLT) examines the application to verify whether a default has occurred and whether all legal requirements have been fulfilled. If satisfied, the Tribunal admits the application and formally commences the Corporate Insolvency Resolution Process (CIRP). Upon admission, a moratorium comes into effect, preventing legal actions, recovery proceedings, and enforcement of security interests against the corporate debtor. This provides a stable environment for the resolution process.

Step 3. Appointment of Interim Resolution Professional (IRP)

After admitting the application, the NCLT appoints an Interim Resolution Professional (IRP) to take control of the management of the corporate debtor. The powers of the Board of Directors are suspended, and the IRP manages the company’s affairs during the initial stage of the insolvency process. The IRP collects information about the company’s assets and liabilities, receives claims from creditors, and ensures smooth conduct of the insolvency proceedings.

Step 4. Constitution of the Committee of Creditors (CoC)

The Interim Resolution Professional verifies the claims submitted by creditors and constitutes the Committee of Creditors (CoC). The Committee generally consists of the financial creditors of the corporate debtor. The CoC plays a central role in the insolvency process by appointing the Resolution Professional, evaluating resolution plans, and deciding the future of the corporate debtor through voting. Its decisions are made according to the voting requirements prescribed under the Code.

Step 5. Invitation and Submission of Resolution Plans

The Resolution Professional invites eligible resolution applicants to submit plans for reviving the corporate debtor. These plans may include restructuring of debts, infusion of fresh capital, change in management, or other measures to restore the company’s financial health. Each resolution plan is examined to ensure compliance with the Insolvency and Bankruptcy Code, 2016 before being placed before the Committee of Creditors (CoC) for consideration.

Step 6. Approval of Resolution Plan

The Committee of Creditors (CoC) evaluates the submitted resolution plans and selects the most suitable proposal through the prescribed voting process. The approved plan is then submitted to the National Company Law Tribunal (NCLT) for confirmation. If the Tribunal finds that the plan complies with the provisions of the Insolvency and Bankruptcy Code, 2016, it approves the plan, making it binding on the corporate debtor, creditors, employees, and other stakeholders.

Step 7. Liquidation of the Corporate Debtor

If no resolution plan is approved within the prescribed period, or if the Committee of Creditors decides to liquidate the company, the NCLT orders liquidation of the corporate debtor. A liquidator is appointed to realize the company’s assets, settle its liabilities, and distribute the proceeds among creditors according to the priority specified in the Code. After completion of the liquidation process, the company is dissolved.

Step 8. Dissolution of the Company

After the liquidation process is completed and all assets have been realized and distributed, the liquidator submits a final report to the National Company Law Tribunal (NCLT). If satisfied that the liquidation has been completed in accordance with the Insolvency and Bankruptcy Code, 2016, the Tribunal passes an order for the dissolution of the company. From the date of the order, the company ceases to exist as a legal entity, bringing the insolvency process to its final conclusion.

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