Section 29: Preparation of Information Memorandum under the IBC
Section 29 requires the resolution professional to prepare an information memorandum for the corporate insolvency resolution process (CIRP) and to provide relevant information to resolution applicants subject to legal safeguards.
Section 29 - statutory provisions
29(1). The resolution professional shall prepare an information memorandum in such form and manner containing such relevant information as may be specified by the Board for formulating a resolution plan.
29(2). The resolution professional shall provide to the resolution applicant access to all relevant information in physical and electronic form, provided such resolution applicant undertakes:
- to comply with provisions of law for the time being in force relating to confidentiality and insider trading;
- to protect any intellectual property of the corporate debtor it may have access to; and
- not to share relevant information with third parties unless clauses (a) and (b) of this sub-section are complied with.
Explanation. For the purposes of this section, "relevant information" means the information required by the resolution applicant to make the resolution plan for the corporate debtor, which shall include the financial position of the corporate debtor, all information related to disputes by or against the corporate debtor and any other matter pertaining to the corporate debtor as may be specified.
What is an information memorandum?
An information memorandum (IM) is a structured disclosure document prepared during CIRP to help prospective resolution applicants understand the corporate debtor's business, assets, liabilities, financial position, material disputes and other matters needed to formulate a viable resolution plan. It is not itself a resolution plan or an assurance that every disclosed item has a particular realizable value.
Duties of the resolution professional
Under Section 25(2)(g), the resolution professional must prepare the information memorandum in accordance with Section 29. Regulation 36 prescribes procedural and substantive requirements for its preparation and circulation. The resolution professional should gather and verify available records, present prescribed information, manage updates and give access to eligible recipients under the applicable confidentiality framework.
The exact deadlines, prescribed particulars and permitted recipients must be checked against the version of Regulation 36 in force for the relevant CIRP; amendments may change these details.
Information typically covered
- Assets and liabilities, including material encumbrances and financial information.
- Financial statements and operational details prescribed by Regulation 36.
- Creditor-related information and material contracts where prescribed.
- Litigation, investigations and disputes involving the corporate debtor.
- Other relevant matters needed for preparation of a resolution plan, subject to the Code and applicable regulations.
Access and confidentiality under Section 29(2)
The right of access under Section 29(2) is conditional. A resolution applicant must undertake to follow applicable confidentiality and insider-trading laws, protect the corporate debtor's intellectual property and refrain from sharing information with third parties unless the statutory safeguards are satisfied. A confidentiality undertaking is therefore an important part of controlled access to sensitive CIRP records.
Resolution applicant: a person who submits a resolution plan to the resolution professional pursuant to the invitation under Section 25(2)(h), subject to the Code's applicable eligibility provisions, including Section 29A.
Corporate debtor: a corporate person that owes a debt to any person, as defined in Section 3(8).
Insolvency and Bankruptcy Board of India (IBBI): the regulatory Board established under the Code; it specifies the information-memorandum requirements through regulations.
Related legal provisions
- Section 25(2)(g): duty of the resolution professional to prepare the information memorandum.
- Section 25(2)(h): invitation of prospective resolution applicants meeting applicable criteria.
- Section 29A: persons ineligible to submit resolution plans.
- Section 30: submission and consideration of resolution plans.
- Regulation 36: detailed rules concerning the information memorandum.
Official legislation and regulatory updates
- India Code - Insolvency and Bankruptcy Code, 2016 (official text)
- IBBI - updated legal framework and consolidated regulations
- IBBI - regulatory circulars
For a particular insolvency proceeding, consult the applicable amendment commencement dates, current CIRP Regulations and relevant orders.