Section 230 of Companies Act

Section 230 of the Companies Act, 2013, enables promoters and creditors of a company to propose arrangement schemes or compromise schemes for restructuring the debt of the company. In 2019, the NCLAT ruled that the section 230 does not apply to persons who are ineligible under section 29A of the IBC i.e. section 230 is not applicable if the company is facing liquidation. Section 29A of the Insolvency and Bankruptcy Code bars promoters of insolvent companies from bidding for their own company. The Supreme Court recently upheld this ruling.