Fast Track Corporate Insolvency explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Fast Track Corporate Insolvency Resolution Process is a mechanism within the IBC designed to speed up resolution for smaller companies and businesses with fewer assets and liabilities. It typically completes within 90 days, against up to 180 days for the standard process, with a one-time extension of a maximum of 45 days.
What the process is
The Fast Track Corporate Insolvency Resolution Process allows a quicker resolution for companies with fewer assets and liabilities. An applicant under Chapter IV (Section 55) must file the application along with proof of the existence of default, as evidenced by records available with an information utility or such other means as may be specified by the Board, to establish that the corporate debtor is eligible.
Eligibility
| Category | Test |
|---|---|
| Small company | As defined under Section 2(85) of the Companies Act, 2013 |
| Startup | A company (other than a partnership firm) as defined in the Ministry of Commerce & Industry notification dated 23.05.2017 |
| Unlisted company | Total assets of less than Rs. 1 crore, as reported in the financial statement for the immediately preceding financial year |
Criteria for a small company
- Paid-up share capital not exceeding ₹4 crore — or such higher amount as may be prescribed, which cannot exceed ₹10 crore.
- Turnover, per the profit and loss account for the immediately preceding financial year, not exceeding ₹40 crore — or such higher amount as may be prescribed, which cannot exceed ₹100 crore.
Exceptions. The definition of a small company does not apply to:
- Holding or subsidiary companies — a company that is a holding or subsidiary company cannot be a small company;
- Section 8 companies — formed for promoting charitable causes; and
- Companies governed by special Acts — any company or body corporate governed by a special Act.
A company can sit comfortably within the capital and turnover thresholds and still fail the small company test because it is a subsidiary of another company. The exclusion is categorical and does not depend on the size of the parent.
Where that happens, the unlisted-company route — total assets below one crore rupees — may still be available on its own terms.
Timeline
- The insolvency commencement date starts the clock.
- The company has 90 days from the insolvency commencement date to complete the process.
- The RP may apply to the NCLT for a one-time extension of a maximum of 45 days, provided a resolution is passed by the CoC.
The process flow
- Application to NCLT, with proof of default.
- Within 14 days of filing, the application is accepted or rejected.
- On acceptance — the insolvency commencement date — the interim resolution professional is appointed, and the public announcement is made immediately after the appointment.
- Moratorium is initiated.
- The CoC is constituted and appoints the RP within 7 days.
- The CoC accepts or rejects the resolution plan.
- An accepted plan is submitted to the NCLT and, on approval, implemented.
- A rejected plan leads to liquidation.
What the compressed timeline demands
Ninety days is half the standard period, and the procedural steps are not proportionately reduced. The practical consequences:
- Claim collation and verification must run in parallel with CoC constitution, not after it.
- Valuation has to be commissioned early, because the CoC cannot assess a plan without fair and liquidation values.
- The 45-day extension is one-time and requires a CoC resolution, so it cannot be treated as slack built into the schedule.
- Proof of default from an information utility is the smoothest route to admission, and delays at admission consume the same 90 days.
Compliance checklist
- Establish eligibility under one of the three categories before filing.
- Check the holding/subsidiary, Section 8 and special Act exclusions.
- File proof of default from an information utility where possible.
- Appoint the RP within 7 days of CoC constitution.
- Commission valuation early in the 90 days.
- Treat the 45-day extension as a one-time contingency requiring a CoC resolution.
Common mistakes
- Assuming a company within the capital and turnover thresholds is a small company despite being a subsidiary.
- Testing total assets below one crore against current figures rather than the immediately preceding financial year.
- Planning on 135 days as if the extension were automatic.
- Sequencing claim verification after CoC constitution.