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CS Professional · Insolvency and Bankruptcy - Law and Practice · Professional and Ethical Practices for Insolvency Practitioners

Nilgiri Resolution Forum Pvt. Ltd. begins enrolling qualified professionals as its members and styles itself an insolvency professional agency under the Code, but it has not obtained any certificate from the Insolvency and Bankruptcy Board of India. What is the legal position?

Nilgiri cannot operate as an insolvency professional agency. The Code says no person may carry on that business or enrol insolvency professionals as members except under a certificate of registration issued by the Board, and no grace period or exemption for examined members exists.

  1. AIt may operate, because the Code does not require registration for agencies enrolling members
  2. BIt may operate if it enrols only persons who have passed the examination
  3. CIt may not carry on business as an insolvency professional agency without a certificate of registration issued by the BoardCorrect
  4. DIt may operate for one year and obtain registration afterwards

Explanation

Section 199 bars any person from carrying on business as an insolvency professional agency and enrolling insolvency professionals as members except under a certificate of registration issued by the Board. Option A is wrong because registration is mandatory. No grace period exists in the text.

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