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CS Professional · Corporate Restructuring, Valuation and Insolvency · Pre-Packaged Insolvency Resolution Process

Sunrise Packaging Pvt Ltd, a company classified as a micro enterprise under the MSMED Act, 2006, has committed a default as defined in section 4 of the IBC. Its promoters wish to explore a pre-packaged insolvency resolution process (PPIRP). Which statement is correct?

A PPIRP application may be made for Sunrise Packaging because it is classified as a micro, small or medium enterprise under the MSMED Act, 2006. Section 54A(1) makes such corporate debtors eligible, and no prior CIRP, absence of creditors or higher turnover is required.

  1. AAn application for PPIRP may be made because it is classified as a micro, small or medium enterpriseCorrect
  2. BPPIRP is available only to companies that have already been admitted into a corporate insolvency resolution process
  3. CPPIRP can be initiated only if the company has no financial creditors
  4. DPPIRP is available only to companies with a turnover above the MSME ceiling

Explanation

Section 54A(1) allows a PPIRP application in respect of a corporate debtor classified as a micro, small or medium enterprise under the MSMED Act, 2006. A company already in CIRP is expressly ineligible under section 54A(2)(b). The other options invent conditions not found in the section.

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