Insolvency and Bankruptcy Code, 2016 | Section 2

Section 2 of the Insolvency and Bankruptcy Code, 2016: Application and Scope

Section 2 identifies the companies, limited liability partnerships, other notified bodies, personal guarantors, firms and individuals to whom the Insolvency and Bankruptcy Code, 2016 (IBC) applies, subject to commencement notifications and the relevant statutory procedures.

Updated: 21 October 2026 | Legislation: Act 31 of 2016

Current text of Section 2 - Application

2. Application. The provisions of this Code shall apply to-

(a) any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law;

(b) any other company governed by any special Act for the time being in force, except in so far as the said provisions are inconsistent with the provisions of such special Act;

(c) any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009);

(d) such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf;

(e) personal guarantors to corporate debtors;

(f) partnership firms and proprietorship firms; and

(g) individuals, other than persons referred to in clause (e),

in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be.

Source: India Code - official consolidated IBC text (PDF). The separate clauses (e), (f) and (g) replaced the former clause (e) through the 2018 amendment, with effect from 23 November 2017.

Meaning and explanation of each clause

Clause (a): Companies under company law

Companies incorporated under the Companies Act, 2013 or earlier company legislation fall within the Code. Corporate insolvency proceedings are governed by the applicable provisions of Part II and relevant regulations.

Clause (b): Companies governed by special Acts

A company governed by a special statute is covered only to the extent that application of the IBC is not inconsistent with that special statute. The specific legal framework must be examined in each case.

Clause (c): Limited liability partnerships

LLPs incorporated under the Limited Liability Partnership Act, 2008 are expressly included. The Code treats an LLP as a corporate person for relevant insolvency purposes.

Clause (d): Other notified incorporated bodies

Other incorporated bodies may be brought within the IBC by a Central Government notification. Coverage under this clause depends on the relevant notification.

Clause (e): Personal guarantors to corporate debtors

A personal guarantor is an individual who guarantees obligations of a corporate debtor. Section 5(22) defines a personal guarantor in this context. Applicable provisions of Part III were brought into force for personal guarantors to corporate debtors from 1 December 2019. Section 60 addresses the adjudicating authority in connected corporate-debtor matters.

Clause (f): Partnership and proprietorship firms

Both partnership firms and proprietorship firms are expressly listed. However, statutory inclusion does not mean every individual or firm insolvency procedure is operational: commencement notifications and applicable rules must be checked.

Clause (g): Other individuals

Individuals other than personal guarantors described in clause (e) are separately covered in the statutory scope. The commencement and operational status of the relevant Part III provisions must be verified before asserting that a particular proceeding is available.

Important definitions and connected provisions

Section 3(7) - Corporate person: includes a company, LLP or other incorporated person with limited liability, but excludes a financial service provider.
Section 3(8) - Corporate debtor: a corporate person who owes a debt to any person.
Section 5(22) - Personal guarantor: an individual who is the surety in a contract of guarantee to a corporate debtor.
Section 60 - Adjudicating authority for corporate persons: establishes the role of the National Company Law Tribunal and addresses related personal-guarantor proceedings.
Section 227 - Financial service providers: permits the Central Government, in consultation with the appropriate financial sector regulator, to notify specified financial service providers or categories for insolvency and liquidation proceedings under a special framework.

Practical distinction: Section 2 determines the broad categories of persons covered by the IBC. It does not, by itself, commence every insolvency or bankruptcy process or establish eligibility to file a particular application.

Amendments and current legal position

The Insolvency and Bankruptcy Code (Amendment) Act, 2018 reorganised Section 2 by identifying personal guarantors, firms and other individuals in separate clauses. The IBBI legal framework also records the Insolvency and Bankruptcy Code (Amendment) Act, 2026 and subsequent regulations. Those developments should be read with their commencement notifications; they do not change the seven categories set out above.

The Supreme Court has considered the distinct treatment of personal guarantors under the IBC. See the Supreme Court judgment hosted by IBBI for discussion of the 2018 amendment and the personal-guarantor framework.

Official legislation and further reading

This article provides general legal information, not advice for a particular proceeding. Consult the current Act, commencement notifications and applicable rules before filing.