1) Which of the following is/are true regarding features of the Insolvency and Bankruptcy Code?
1) Proposed Adjudicating Authorities will deal with commercial aspects such as management of the affairs of the corporate debtor, facilitating formation of committee of creditors, organising their meetings, examination of the resolution plan, etc.
2) The Code also provides to complete the resolution process in 90 days.
a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
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Answer
Explanation
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ANSWER: Only 2
Explanation:
- The Code separates commercial aspects of the insolvency proceedings from judicial aspects. While Insolvency Professionals (IPs) will deal with commercial aspects such as management of the affairs of the corporate debtor, facilitating formation of committee of creditors, organising their meetings, examination of the resolution plan, etc.,
- Judicial issues will be handled by proposed Adjudicating Authorities (National Company Law Tribunal / Debt Recovery Tribunal).
- One more important institution created under the Code is the ‘Information Utility’ which would store financial information and data and terms of lending in electronic databases. This would eliminate delays and disputes about facts when default does take place.
- The Code also provides a fast track insolvency resolution process for corporates and LLPs. This will be an enabler for start-ups and small and medium enterprises (SMEs) to complete the resolution process in 90 days (extendable to 45 days in deserving cases).
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