Section 2 of the Insolvency and Bankruptcy Code 2016: Application
Section 2 of the Insolvency and Bankruptcy Code, 2016 identifies the companies, bodies, personal guarantors, firms and individuals to whom the Code may apply in relation to insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be.
Current Text of Section 2 - Application
Section 2. The provisions of this Code shall apply to:
- any company incorporated under the Companies Act, 2013 (18 of 2013) or under any previous company law;
- 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;
- any Limited Liability Partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009);
- such other body incorporated under any law for the time being in force, as the Central Government may, by notification, specify in this behalf;
- personal guarantors to corporate debtors;
- partnership firms and proprietorship firms; and
- individuals, other than persons referred to in clause (e),
in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be.
The official consolidated text of the Code can be checked on India Code - Insolvency and Bankruptcy Code, 2016. Current Acts, amendments, notifications, regulations and circulars are also published by the Insolvency and Bankruptcy Board of India.
Meaning and Scope of Section 2
Section 2 is the gateway provision describing the classes of persons and entities that fall within the subject matter of the Code. It should be read with the particular Part and provision invoked, the definitions in the Code, and the commencement notifications that bring specific provisions into force for particular categories.
The words at the end of Section 2 - "in relation to their insolvency, liquidation, voluntary liquidation or bankruptcy, as the case may be" - indicate that the applicable process depends on the legal status of the debtor and the relevant provisions of the Code. Section 2 therefore does not mean that every insolvency or bankruptcy provision operates identically for every category listed in clauses (a) to (g).
Important Definitions Relevant to Section 2
- Corporate person - Section 3(7)
- A corporate person includes a company as defined in Section 2(20) of the Companies Act, 2013, a limited liability partnership as defined under the Limited Liability Partnership Act, 2008, and any other person incorporated with limited liability under any law for the time being in force. The statutory definition excludes a financial service provider.
- Corporate debtor - Section 3(8)
- A corporate debtor means a corporate person who owes a debt to any person.
- Personal guarantor - Section 5(22)
- For Part II of the Code, a personal guarantor means an individual who is the surety in a contract of guarantee to a corporate debtor.
- Company
- Clause (a) covers a company incorporated under the Companies Act, 2013 or under a previous company law. Clause (b) separately addresses a company governed by a special Act, subject to the stated inconsistency exception.
- Limited Liability Partnership
- Clause (c) expressly covers an LLP incorporated under the Limited Liability Partnership Act, 2008.
Persons and Entities Covered by Section 2
| Clause | Category | Scope in Section 2 |
|---|---|---|
| (a) | Companies | Companies incorporated under the Companies Act, 2013 or any previous company law. |
| (b) | Companies governed by a special Act | Covered except to the extent that provisions of the Code are inconsistent with the applicable special Act. |
| (c) | Limited Liability Partnerships | LLPs incorporated under the Limited Liability Partnership Act, 2008. |
| (d) | Other incorporated bodies | Other bodies incorporated under law when specified by Central Government notification. |
| (e) | Personal guarantors | Personal guarantors to corporate debtors. |
| (f) | Partnership and proprietorship firms | Partnership firms and proprietorship firms are expressly included. |
| (g) | Other individuals | Individuals other than the personal guarantors referred to in clause (e). |
Special Act Companies
Clause (b) recognizes that a company may be governed by a special enactment. The Code applies to such a company except to the extent its provisions are inconsistent with the provisions of that special Act. Whether an inconsistency exists depends on the provisions involved and the governing legal framework.
Other Bodies Notified by the Central Government
Clause (d) enables the Central Government to bring another incorporated body within the Code by notification. The notification and the legal status of the body should therefore be checked before relying on this clause.
Personal Guarantors to Corporate Debtors
Clause (e) separately identifies personal guarantors to corporate debtors. The insolvency resolution and bankruptcy framework for personal guarantors to corporate debtors was brought into operation from 1 December 2019. The applicable rules and IBBI regulations should be read with Part III and Section 60 of the Code.
Application Depends on Commencement and Notification
Section 2 identifies the categories within the Code's statutory coverage, but the operation of a particular insolvency or bankruptcy process also depends on whether the relevant provisions have been brought into force. Section 1(3) permits different commencement dates for different provisions of the Code.
Accordingly, the inclusion of a category in Section 2 should not by itself be treated as proof that every process in the Code is operational for that category. For a current proceeding, the relevant Part of the Code, commencement notification, rules, regulations and applicable judicial decisions should be checked.
Amendment History of Section 2
Originally, clause (e) referred generally to partnership firms and individuals. The Insolvency and Bankruptcy Code (Amendment) Act, 2018 omitted the word "and" after clause (d) and substituted the earlier clause (e) with separate clauses covering personal guarantors to corporate debtors, partnership firms and proprietorship firms, and other individuals. The amendment was given retrospective effect from 23 November 2017.
The IBBI Acts page provides access to the Code and subsequent amendment Acts, including the Insolvency and Bankruptcy Code (Amendment) Act, 2026. The 2026 amendment received Presidential assent on 6 April 2026. Its notified amendments affect numerous provisions of the Code, but Section 2 remains in the form set out above.
Practical Reading of Section 2
Before initiating or responding to an IBC proceeding, identify the legal character of the debtor, determine the relevant insolvency or bankruptcy process, verify that the applicable statutory provisions have commenced for that category, and then read Section 2 with the relevant definitions and procedural provisions. For corporate insolvency, the provisions of Part II are particularly relevant; for personal guarantors, the notified provisions of Part III and the applicable rules and regulations must also be considered.