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CS Professional · Insolvency and Bankruptcy - Law and Practice · Winding-Up by Tribunal

Facing financial stress, Rudra Exports Ltd executed a deed assigning all its properties and assets to trustees for the benefit of all its creditors. Which statement is correct under the Companies Act, 2013?

The assignment is void. The Companies Act, 2013 declares that any transfer or assignment by a company of all its properties or assets to trustees for the benefit of all its creditors is void, without any exception based on consent or timing.

  1. AThe assignment is valid if all creditors consent in writing
  2. BThe assignment is valid if made in the ordinary course of business
  3. CThe assignment is voidCorrect
  4. DThe assignment is valid if made more than one year before any petition

Explanation

Section 330 provides that any transfer or assignment by a company of all its properties or assets to trustees for the benefit of all its creditors is void. It contains no exception for consent, ordinary course or timing, so the other options add conditions that the text does not contain.

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