Introduction
Of the three gateways into a Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016 - Sections 7, 9, and 10 - Section 10 stands apart as the only route where the corporate debtor itself pulls the trigger. Rather than waiting for a financial or operational creditor to move the NCLT, the company's own board, or the partners of an LLP, can voluntarily file for CIRP once a default has occurred. Historically the least-used of the three routes in volume terms, Section 10 nonetheless carries its own procedural discipline - and the IBC (Amendment) Act, 2026 has now materially reshaped how it operates. This article covers the mechanics of Section 10, the corporate governance requirements layered on top of it by the 2018 amendment, and the changes introduced this year.
Who Can File Under Section 10
Section 10(1) permits a "corporate applicant" to file for CIRP where the corporate debtor has committed a default. Section 5(5) defines a corporate applicant to include:
- the corporate debtor itself;
- a member or partner of the corporate debtor authorised to make the application under the relevant constitutional documents;
- an individual in charge of managing the operations and resources of the corporate debtor; or
a person having control and supervision over the financial affairs of the corporate debtor.
In practical terms, this is almost always the company's board of directors resolving to file, or the designated partners of an LLP.
Why Companies File Voluntarily
A Section 10 filing is typically a deliberate strategic choice rather than a reactive one. The commonly cited advantages include:
- Proactive control: the company can address financial distress on its own terms before creditors move first, rather than being forced into a defensive posture.
- Moratorium protection: once admitted, Section 14's moratorium halts suits, execution proceedings, and recovery actions against the corporate debtor, providing breathing room to attempt restructuring.
- Orderly process: filing voluntarily, with full access to its own books, generally allows for a cleaner and more complete initial disclosure than an adversarial filing by a creditor.
Against this, companies must also weigh the loss of management control that follows admission, the reputational signal a voluntary filing sends to the market, lenders, and counterparties, and the governance hurdles discussed below.
Governance Requirement: Board Resolution and Special Resolution
Filing under Section 10 is not simply a board-level decision that can be made unilaterally. Since the Insolvency and Bankruptcy Code (Second Amendment) Act, 2018, effective June 6, 2018, the application must be accompanied by:
- a special resolution passed by shareholders of the corporate applicant, or a resolution passed by at least three-fourths of the total number of partners (for an LLP or partnership-style entity), approving the filing.
This was a deliberate governance safeguard, introduced after instances where promoters used Section 10 filings - sometimes in collusion with a friendly financial creditor - to gain control of the resolution process or to pre-empt more adversarial creditor action. Requiring supermajority shareholder or partner approval raises the bar and reduces the risk of a board acting in isolation from the wider ownership.
Information to Be Furnished With the Application
Under Section 10(3), the corporate applicant must furnish, along with the application:
(a) information relating to its books of account and such other documents relating to the specified period, and
(b) the name of the resolution professional proposed to be appointed as interim resolution professional (IRP).
The IBBI's regulations under the Insolvency Resolution Process for Corporate Persons framework prescribe considerable granularity here - the corporate applicant must furnish details of its books of account for the immediately preceding three financial years (or since incorporation, if shorter), including a complete list of all bank accounts operated, with account numbers, bank names, branches, and authorised signatories, among other financial particulars. The scope of this information requirement has been expanded further under the 2026 amendment cycle, reinforcing the regulator's emphasis on complete, contemporaneous financial disclosure at the point of filing rather than reconstruction after admission.
Admission Timeline
Section 10(4) requires the Adjudicating Authority to admit or reject the application within 14 days of receipt. The application is admitted where it is complete, all required information has been furnished, and - historically - no disciplinary proceedings were pending against the proposed IRP. Where the application is defective, the applicant is granted an opportunity, generally seven days, to rectify the defect before rejection; the Supreme Court's ruling in Surendra Trading Company v. Juggilal Kamlapat Jute Mills clarified that this seven-day window is directory rather than a strict, non-extendable deadline, giving some practical flexibility to applicants correcting genuine defects.
Key Changes Under the IBC (Amendment) Act, 2026
The Insolvency and Bankruptcy Code (Amendment) Act, 2026 received Presidential assent on April 6, 2026, and makes several changes that touch Section 10 directly, alongside the wider overhaul of the admission and withdrawal framework:
Corporate debtor can no longer nominate the IRP: in what is arguably the most significant substantive change to Section 10, the corporate applicant's ability to propose its own choice of interim resolution professional has been curtailed. This directly addresses the governance concern that a company (or its promoters) could effectively hand-pick a sympathetic IRP through a voluntary filing - a criticism long raised by creditors and insolvency professionals about the potential for Section 10 to be used as a management-friendly alternative to creditor-driven insolvency.
Mandatory recording of reasons for delay: a new requirement under Section 10(4) obliges the Adjudicating Authority to record reasons in writing where it fails to admit or reject an application within the 14-day window, bringing Section 10 in line with the equivalent discipline now imposed on Section 7 and Section 9 applications, and aimed at curbing the chronic problem of applications sitting undecided at the NCLT for extended periods.
- Expanded disclosure under Section 10(3): The scope of financial and operational information a corporate applicant must furnish has been broadened, while the earlier bar on admission where disciplinary proceedings were pending against the proposed IRP has been removed - a consequence, in part, of the IRP nomination change described above making that particular safeguard less relevant.
- Interplay with the new Creditor-Initiated Insolvency Resolution Process (CIIRP): The Amendment Act inserts a new Chapter IV-A (Sections 58A–58K) creating a separate, creditor-led, debtor-in-possession insolvency mechanism. Section 11 has been amended to clarify the interplay between the two: once CIRP has been initiated under Section 10 (or Sections 7 or 9) against a corporate debtor, CIIRP cannot be triggered against the same debtor, and vice versa - preventing overlapping or competing insolvency mechanisms from being run against one company simultaneously.
- Post-admission withdrawal tightened: Section 12A has been substituted to permit withdrawal of an admitted application only after constitution of the Committee of Creditors and before the first invitation for resolution plans is issued, subject to approval by 90% of the CoC's voting share - closing off the earlier, more flexible withdrawal window that had occasionally been used to settle and exit proceedings quickly after filing.
As with the wider 2026 amendment package, several of these provisions await notification of a specific effective date; practitioners should confirm the applicable commencement notification before advising on live filings.
Practical Considerations for Practitioners
- Board and shareholder process: ensure the special resolution (or three-fourths partner resolution) is validly passed, properly recorded in the minutes, and available for annexure - defects here are an easy ground for rejection or challenge.
- Books of account readiness: given the granularity of disclosure now required - down to bank account-level detail across up to three financial years - companies contemplating a Section 10 filing should begin compiling this documentation well before the filing date, not after.
- IRP selection under the new regime: with the corporate applicant's ability to nominate its own IRP curtailed, practitioners advising corporate debtors should factor this into the overall strategy and timeline for a voluntary filing, since the process will no longer offer the same degree of control over who administers the initial stages of CIRP.
- Weigh Section 10 against other restructuring options: given the loss of management control on admission and the reduced influence over IRP selection, companies should evaluate whether informal restructuring, a scheme of arrangement under the Companies Act, or engagement with lenders outside the IBC framework might better serve the objective before committing to a Section 10 filing.
Conclusion
Section 10 remains a distinctive feature of the IBC - the one route into CIRP that puts the decision to initiate in the hands of the company itself. But "voluntary" has never meant unsupervised: the 2018 governance safeguards required supermajority shareholder or partner approval, and the 2026 amendments go further still, stripping the corporate applicant of its earlier ability to steer the IRP appointment and layering on tighter disclosure and timeline discipline. The direction of travel is unmistakable - toward a Section 10 process that looks procedurally closer to Sections 7 and 9 than it once did, with correspondingly less room for a debtor-friendly approach to voluntary insolvency.
The author is an Associate Company Secretary with practical experience in IPO compliance, corporate governance, and cross-border transaction structuring.
Disclaimer: This article is intended solely for general informational and educational purposes and does not constitute legal advice. The provisions of the Insolvency and Bankruptcy Code, 2016, as amended by the Insolvency and Bankruptcy Code (Amendment) Act, 2026, are subject to further notification, rules, and judicial interpretation, and several provisions referenced in this article had not been brought into force as of the date of writing. Readers should independently verify the current legal position, including applicable commencement notifications, before relying on or acting upon the contents of this article, and are advised to consult a qualified professional for guidance specific to their facts and circumstances. The author and publisher accept no liability for any loss or damage arising from reliance on this article.
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