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CS Professional · Insolvency and Bankruptcy - Law and Practice · Bankruptcy for Individuals and Partnership Firms

Pooja Iyer, a creditor, is owed a partnership debt by a firm, Iyer Brothers. She wants flexibility in choosing whom to proceed against. Which option is available to her under section 95?

Under section 95(2), a creditor owed a partnership debt may initiate the insolvency resolution process against any one or more partners of the firm, or against the firm itself. There is no restriction to only the firm, all partners together, or a managing partner.

  1. AShe may proceed only against the firm, never against partners
  2. BShe may proceed against any one or more partners of the firm or against the firmCorrect
  3. CShe may proceed only against all partners together
  4. DShe may proceed only against the managing partner

Explanation

Section 95(2) allows a creditor, for a partnership debt, to initiate the process against any one or more partners of the firm or against the firm. The other options impose restrictions that the text does not contain.

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