IBBI Amendment 2025:
Understanding the New Mandatory Contents of a
Resolution Plan
(A brief note for learning and awareness)
What is this amendment about?
The Insolvency and Bankruptcy Board of India (IBBI) published a notice on December 22, 2025 about the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) (Seventh Amendment) Regulations, 2025. These regulations add a new sub-regulation 38(3A) into the IBBI (CIRP) Regulation, 2016.
Regulation 38 outlines the mandatory contents of a resolution plan. As the Insolvency and Bankruptcy Code has evolved in time through judicial interpretation and practical experience, various loopholes have been observed at the resolution plan stage, particularly around ownership, transparency and clarity on immunity under Section 32 A.
In several cases, questions regarding:
a) who actually controls the resolution applicant, and;
b) whether the applicant is eligible to claim immunity from past offences;
were raised after the approval of the resolution plan. This often led to regulatory scrutiny, examinations, and avoidable litigation post-resolution.
The 2025 amendment attempts to address these concerns by mandating certain disclosures and declarations to be made in advance, at the time of submission of the resolution plan.
The aim is not to impose new limitations on the eligibility, but to make sure that fundamental information relevant to risk evaluation along with accountability is clearly available to stakeholders at an early stage.
What has been newly introduced under Regulation 38(3A)?
The Seventh Amendment Regulations, 2025 have inserted Regulation 38(3A) into the IBBI (CIRP) Regulations, 2016, specifying two key additions to the mandatory contents of a resolution plan.
These additions are:
1. Beneficial Ownership Disclosure:
Prerequisite of the amended provision:
Every resolution plan must include a statement of beneficial ownership, which clearly identifies and covers the details of:
a) Natural persons who ultimately own or control the resolution applicant;
b) The complete shareholding chain, including all intermediate entities, and;
c) The jurisdiction of each intermediate entity (India or foreign)
All of these statements must be formatted according to the specifications set forth by the IBBI.
Objective of the Amendment:
a) To increase transparency in ownership;
b) To avoid disguised control or clandestine promoters’ groups;
c) To enable the creditors/stakeholders to know who actually controls the resolution applicant, even by means of intricate structures.
Example:
If a resolution applicant is controlled through a chain like:
Company D (Bidder) → Company C (Located in Mauritius) → Company B (Located in Singapore) → Company A (Located in India)
The resolution plan must now clearly state:
· Who the ultimate natural persons are (e.g., Mr. X, Ms. Y from the Company D);
· How the ownership flows through each entity;
· Which jurisdictions each company belongs to.
This eliminates any uncertainty regarding ultimate control, which is critical for COCs, regulators, and RPs evaluating the plan.
2. Affidavit on Section 32A Eligibility
Prerequisite of the amended provision
Every resolution applicant must submit an affidavit confirming whether they are eligible or not eligible to claim immunity under Section 32A of the IBC.
Current Status of the Provision:
Section 32A provides immunity to the corporate debtor from offences committed prior to the commencement of the corporate insolvency resolution process, provided the new management is not connected to prior wrongful conduct or in any manner is related to the corporate debtor. While this provision was in place, there was as such no necessity to declare eligibility in advance. However, problems began to surface after the final approval of the resolution plan.
Purpose of the affidavit:
· Forces the resolution applicant to carefully analyze their position before submitting the resolution plan.
· Ensures COCs and RPs understand potential legal concerns.
· Reduces post-approval disputes or litigation regarding eligibility for immunity.
Practical example:
· Consider a resolution applicant has previous links with promoters of the corporate debtor.
· This modification requires them to declare eligibility upfront rather than assuming immunity will apply automatically.
· If they are not eligible under Section 32 (A), stakeholders are aware immediately, which allows them with better decision-making.
Why both disclosures matter together?
· Beneficial ownership disclosure ensures transparency of control
· Section 32A affidavit ensures clarity on legal protections
Together, they allow:
· COCs to evaluate plans effectively
· RPs to identify risks before approval
· Resolution applicants to follow structured compliance, reducing uncertainty
In broad terms, these improvements are an effort to improve governance and accountability in the insolvency process.
Why this amendment matters (Practical Understanding)
Although the insertion of Regulation 38(3A) is limited, its applications can prove significant.
1. Greater transparency at the plan evaluation stage
By mandating disclosure of beneficial ownership, the amendment guarantees that stakeholders are not restricted to analyze only the immediate corporate structure of the resolution applicant. Instead, they develop understanding into the natural persons who ultimately own or control the applicant, especially in cases where intricate or multilayered arrangements are involved.
This eliminates the possibility of uncertainty and increases reliance on the resolution process.
2. Early clarity on Section 32A immunity
Section 32A of the IBC offers the corporate debtor immunity from previous offences, subject to specific terms. While this provision already existed, disputes often arose when eligibility was to be determined after plan approval.
Requiring a specific affidavit on Section 32A eligibility encourages resolution applicants to thoroughly consider their position and express it beforehand. This helps avoid later confusions and ensures that all creditors/stakeholders have a solid understanding of the legal position from the beginning.
3. Better decision-making for stakeholders
For Committees of Creditors (COCs) and Resolution Professionals (RPs), such disclosures may:
· help with better evaluation of legal and regulatory risk;
· reduce post-approval challenges;
· encourage more informed decision-making
For resolution applicants, the amendment underlines the importance of clear disclosures and structured compliance.
4. A broader shift in the insolvency framework
On a broader level, this amendment indicates an adjustment in the insolvency regime away from a primary focus on speed and resolution results and toward a stronger emphasis on governance, accountability, and process transparency.
While the specific formats required by the IBBI are still awaited, this amendment demonstrates a desire to strengthen confidence in the resolution process by addressing any concerns early on.
References:
1) Insolvency and Bankruptcy Code, 2016 – Section 32A
2) IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 – Regulation 38