The document outlines the corporate insolvency resolution process for Muds Management Pvt. Ltd., explaining the distinction between insolvency and bankruptcy. It describes methods to assess insolvency, identifies financial and operational creditors, and details the steps involved in the corporate insolvency resolution, including the appointment of a resolution professional and the approval of a resolution plan by the NCLT. Key tests for insolvency include the cash-flow test and the balance sheet test.

1. CORPORATE INSOLVENCY
RESOLUTION PROCEDURE
MUDS Management Pvt. Ltd.

2. Insolvency is a financial situation, where an
entity or an individual is unable to meet the
financial obligations due to excess of
liabilities over assets, whereas, Bankruptcy
is a legal procedure where the court of law
passes orders with respect to insolvency of
an individual or entity and consequently
passes orders for its resolution.
AN OVERVIEW
MUDS Management Pvt. Ltd.

3. “A company is declared insolvent if it is
unable to pay its debts to its creditors.”
”
MEANING OF
CORPORATE INSOLVENCY
MUDS Management Pvt. Ltd.

4. WAYS TO CHECK FOR
CORPORATE INSOLVENCY
There are two ways to check for corporate insolvency
The Cash-Flow Test The Balance Sheet Test
MUDS Management Pvt. Ltd.

5. FINANCIAL CREDITOR
Financial Creditor could be any person to
whom a business debt is owed or a
person to whom such amount is legally
assigned or transmitted.
For example: Banks or other financial
institutions.
MUDS Management Pvt. Ltd.

6. OPERATIONAL CREDITOR
MUDS Management Pvt. Ltd.
Operational Creditor could be any person
to whom an operational debt is owed and
includes any person to whom such
amount has been legally assigned or
transferred for goods or services done by
them.
For example: vendors and suppliers,
employees, government etc.

7. 2 4
1 3 5
Interim Resolution
Professional & Moratorium
Appointment of
Resolution Professional
Application
to NCLT
Verification and
Analysis of Claims
Approval of the
“Resolution Plan”
CORPORATE INSOLVENCY RESOLUTION PROCESS
MUDS Management Pvt. Ltd.