Insolvency and Bankruptcy Code
Q. Which of the following statements is/are correct about Insolvency and Bankruptcy Code, 2015?
1. The Bill proposes to establish an Insolvency Regulator
2. The entire banckrupcy process has to be decided within 180 days, with a further 90 days being granted for special cases.- Published on 24 Dec 15a. Only 1
b. Only 2
c. Both
d. None
ANSWER: Both
- Under the Bankruptcy Code, creditors of a defaulting company can drag an insolvent company to the National Company Law Tribunal (or an adjudicating authority set up under the code) and get it declared a defaulter within 14 days.
- A moratorium can then be declared on creditors, so that the company can function normally till its future is decided by its creditors
- A resolution professional put in charge of running the company.
- The entire process, from start to finish, has to be decided within 180 days, with a further 90 days being granted for special cases.
