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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

Vanguard Resolve Pvt Ltd begins enrolling persons as members and describing itself as an insolvency professional agency under the Code. It has not applied to the Insolvency and Bankruptcy Board of India for any certificate. Which statement is correct?

Vanguard Resolve cannot function as an insolvency professional agency or enrol insolvency professionals as members without a certificate of registration issued by the Board. Section 199 prohibits carrying on such business otherwise, so the agency itself must be registered.

  1. AIt may operate freely, because registration is needed only for the agency's insolvency professional members
  2. BIt may operate if it enrols only members who hold a professional qualification in law or accountancy
  3. CIt may operate as an agency only after the Central Government approves its bye-laws, without the Board's registration
  4. DIt cannot carry on business as an insolvency professional agency or enrol insolvency professionals as members without a certificate of registration issued by the BoardCorrect

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. Registration of the agency itself is therefore mandatory. The claim that only members need registration is wrong, because the bar applies to the agency.

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