Skip to content

CS Professional · Insolvency and Bankruptcy - Law and Practice · Cross Border Insolvency (Elective 7.5)

Meridian Textiles Ltd, an Indian company, has a subsidiary in Dubai and creditors in both countries. An Indian insolvency professional is appointed to run a corporate insolvency resolution process for Meridian. Under Section 208 of the IBC, which of the following is the insolvency professional's function in this process?

Under Section 208(1) of the IBC, once a process such as corporate insolvency resolution has been initiated, the insolvency professional must take the actions necessary in that process. The function is not limited to liquidation, and registering agencies or issuing show cause notices belongs to the Board.

  1. ATo take such actions as may be necessary in the corporate insolvency resolution process once it has been initiatedCorrect
  2. BTo act only after the Adjudicating Authority has ordered liquidation of the company
  3. CTo register insolvency professional agencies under the Code
  4. DTo issue show cause notices to insolvency professional agencies after inspection

Explanation

Section 208(1) provides that where an insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, the insolvency professional takes such actions as are necessary, including in a corporate insolvency resolution process under Chapter II of Part II. Option B is wrong because the function covers resolution, not liquidation alone. Registration of agencies and show cause notices are matters for the Board.

Did you get it right without looking?

One question tells you little. A timed set on Cross Border Insolvency (Elective 7.5) shows your real accuracy, how long you take and where you lose marks.

Practise Cross Border Insolvency (Elective 7.5)Free diagnostic mock

More Cross Border Insolvency (Elective 7.5) questions