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CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency

Insolvency Professional Agency 'Vidhi IPA' wants to know who decides the minimum number of independent members that must sit on its governing board. Under the Insolvency and Bankruptcy Code, 2016, what is the correct position?

The Insolvency and Bankruptcy Board of India specifies the minimum number of independent members on an insolvency professional agency's governing board through regulations under section 203. The agency, its members, the Central Government and the adjudicating authority do not fix this number under that section.

  1. AThe Board may specify it by regulations made under section 203Correct
  2. BThe agency's members decide it by a simple majority at an annual general meeting
  3. CThe Central Government fixes it by notifying a rule in each financial year
  4. DThe adjudicating authority fixes it at the time of registration of the agency

Explanation

Section 203 empowers the Board to make regulations specifying the setting up of the governing board and the minimum number of independent members. The agency's own members or the adjudicating authority have no such power under this section. The Central Government is not given this role in section 203.

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