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

Vidyut Resolution Forum, a newly formed body, starts enrolling insolvency professionals as its members and conducting their examinations. It has not applied to the Insolvency and Bankruptcy Board of India for any registration, arguing that it only trains professionals. Under the Code, what is the position?

Vidyut Resolution Forum cannot act as an insolvency professional agency or enrol insolvency professionals as members without a certificate of registration issued by the Board. The Code gives no exemption for training bodies and no grace period, so enrolling members before registration is not permitted.

  1. AIt may enrol members freely because training bodies are exempt from registration
  2. BIt may enrol members if the Central Government gives oral approval
  3. CIt cannot carry on business as an insolvency professional agency and enrol insolvency professionals as members except under a certificate of registration issued by the BoardCorrect
  4. DIt may enrol members for one year and apply for 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. The Code gives no exemption for training bodies or for a trial period, so the first and fourth options are wrong.

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