Insolvency Issue in Corporate Law: A Reference of Nepal

Abstract

Insolvency is the important issue of contemporary business world which can be used both in personal sense and corporate sense. However, personal insolvency is little practiced across the globe despite the origin of insolvency from it whereas corporate insolvency is the basic part of contemporary corporate law. So, insolvency law makes global business order possible because the distress company or legal person are liquidated and dissolved by using same techniques, which prevents the company from further deterioration. There can be much effort to rescue company through receivership and examination-ship. Otherwise, insolvency of company through liquidation; both voluntary and compulsory is the final resort. Moreover, bankruptcy is generally used for personal economic distress and insolvency is used for corporate economic and financial distress. Both, restructuring and dissolution are the two part of the insolvency process. So, this paper tries to analyze the insolvency issues in relation with Nepalese insolvency law. Conversely, prevailing insolvency law of Nepal doesn’t deal with foreign aspect of insolvency. It brings challenges because contemporary business and corporate worlds are cross-national and transnational in nature. Thus, insolvency is the result and answer of corporate failure caused by any incidences. It has different point of view i.e. benefit of creditors, business contract, communitarian, economic, accountability, curative, moral and enforcement etc.