1. Section – I Introduction & Corporate Insolvency Resolution Process(CIRP) under Insolvency and Bankruptcy Code, 2016.
2. Section – II IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016
3. Section -III Adjudicating Authority for Corporate Persons
4. Section – IV Offences and Penalties

Question No.1: MCQ for Pre Test- Corporate Restructuring, Valuation and Insolvency 

Which of the given statement is incorrect in respect of “Corporate Applicant” means?

• Corporate Debtor, or
• An individual who is in charge of managing the operations and resources of the corporate debtor, or
• A person in favour of whom security interest is created or
• A person who has the control and supervision over the financial affairs of the corporate debtor

Question No.2

Bankruptcy Law Reforms Committee (BLRC) was set up under the Chairmanship of Shri______

• J J Irani
• TK Viswanathan
• N L Mitra
• V B Eradi

Question No.3: MCQ for Pre Test- Corporate Restructuring, Valuation and Insolvency 

_________ is an offer to the shareholders of a company, who are not promoters of the company or the sellers of the shares under an agreement, to buy their shares in the company at the offered price within the stipulated period of time.

• Friendly takeover
• Hostile takeover
• Buy-back
• Takeover bid

Question No.4

An appeal by aggrieved party against the order refusing any circular under sub-section 238 of the Companies act, 2013 shall be supported with_____ in the Form No. NCLT.6

• Statement by or on behalf of the transferee company
• Circular
• Offer of scheme
• Affidavit

Question No.6

As per Section 24(3) of the IBC (Code), the resolution professional shall give notice of each meeting of the committee of creditors to operational creditors or their representatives if the amount of their aggregate dues is_____ of the debt.

• not less than ten percent
• not more than ten percent
• not less than twenty percent
• not more than twenty percent

Question No.7

Where the Chairperson of the meeting files the report of the meeting called under section 230 of the Companies Act, 2013, the Company shall present the petition to the Tribunal (NCLT) in Form No.______ for the sanction of the scheme

• CAA-4
• CAA-5
• NCLT-3
• NCLT-4

Question No.8

______________ is an investment strategy of using borrowed money, specifically, the use of various financial instruments or borrowed capital to increase the potential return of an investment.

• Rehabilitation finance
• Leverage
• Depository receipt
• Funding through Swaps

Question No.9

Under Section 94 a debtor shall not be eligible to apply for insolvency resolution process if an application regarding insolvency resolution process has been admitted in respect of the debtor during the period of _________the date of submission of the application under this Section

• Six months preceding
• Thirty six months preceding
• Three months preceding
• Twelve months preceding

Question No.10

Which one of the following is not a common reason for voluntary liquidation of companies?

• Not carrying business operations
• Commercially unviable
• Mismanagement
• Running into losses

Question No.11

The_______ is designed to assist States to equip their insolvency laws with a modern legal framework to more effectively address cross-border insolvency proceedings concerning debtors experience severe financial distress or insolvency

• United States Bankruptcy Code
• Insolvency and Bankruptcy Code, 2016 (India)
• United Nations Commission on International Trade Model Law
• Bankruptcy Act, 1966 (Australia)

Question No.12

In case of listed company, public announcement of buy-back shall be made within________

• 10 working days from the date of Board/shareholder’s resolution
• 2 working days from the date of Board/shareholder’s resolution
• 15 working days from the date of Board/shareholder’s resolution
• 30 working days from the date of Board/shareholder’s resolution

Question No.13

_______is a meaningful analysis of the collected information to arrive at some decision about the potential transaction. It is integral to business It is exercised in a simple over-the-counter transaction or a complicated merger and acquisition transaction.

• Future projection
• Due diligence
• Planning
• Budgeting

Question No.14

Debt restructuring mechanisms such as Framework for Revitalizing Distressed Assests, Corporate Debt Restructuring Scheme (CDR) and the Joint Lenders’ Forum (JLF) Framed by______ has been withdrawn vide a circular dated 12 February 2018.

• SBI
• IBBI
• RBI
• SEBI

Question No.15

The Law of Insolvency in India owes its origin to_________

• German’s Law
• Australia’s Law
• USA’s Law
• English Law

Question No.16

According to section 281(1), where the tribunal has made a winding up order or appointed a Company liquidator, such liquidator shall,_______ from the order, submit to the tribunal, a report containing the particulars, like, the nature and details of the assets of the company, amount of capital issued, subscribed and paid-up, guarantees etc.

• within thirty days
• within sixty days
• within ninety days
• within one eighty days

Question No.17

Where a scheme of compromise or arrangement is proposed, the Tribunal (NCLT) may order a meeting of_______

• Board of Directors
• Creditors or members or any class of them
• Shareholders and company
• Debtors or any class of them

Question No.18

The authorized representative shall circulate the minutes of the meeting received by the resolution professional to creditors in a class and announce the voting window_______ before the window opens for voting instructions and keep the voting window open for at least twelve hours.

• At least twenty-four hours
• At least forty-eight hours
• At least Ninety-six hours
• At least Seventy-two hours

Question No.19

______________ is not termed as capital assets as per Section 2(14) of the Income Tax Act, 191

• Property of any kind held by an assessee, connected with his business or profession
• Property of any kind held by an assessee, not connected with his business or profession
• Any securities held by a Foreign Institutional Investor which has invested in such securities in accordance with the regulations made under SEBI Act, 1992
• Stock in trade

Question No.20

Which one is not a part of an External restructuring?

• Restructuring through acquisition of controlling stake
• Restructuring through mergers
• Restructuring through conversion of debt of the corporate debtor into securities of the Corporate debtor
• Restructuring through creation of new departments to serve growing markets or downsizing departments to conserve overheads

Question No.21

An application for merger and amalgamation shall be filed with NCLT by_________

• Only Transferor Company
• Only Transferee Company
• Both Transferor and Transferee Company
• By only target company

Question No.22

The Insolvency and Bankruptcy Code, 2016 is drafted by the_______

• Raghuram Rajan committee
• Bankruptcy Law Reforms committee
• Financial Sector Legislative Reforms Commission
• J J Irani Committee

Question No.23

_________ Merger involves firm engaged in unrelated types of activities.

• Vertical
• Horizontal
• Conglomerate
• Demerger

Question No.24

The Competition Act provides for a deemed clearance if the Competition Commission of India (CCI) does not pass an order_______ from the date of notification.

• Within 180 days
• Within 200 days
• Within 210 days
• Within 365 days

Question No.25

Section 54A of the Insolvency and Bankruptcy Code, 2016, lays down the provisions of a pre-packaged insolvency resolution process MSME’ Threshold Cap in Turnover for Small Enterprise is_____

• 1 crore
• 10 crore
• 50 crore
• 250 crores

Question No.26

Which of the following shall supervise the implementation of the scheme of compromise arrangement after it is sanctioned by the Tribunal?

• Central Government
• Creditors or members or any class of them
• Official Liquidator
• NCLT

Question No.27

Valuation involves financial modeling, in case of merger/ amalgamation, calculating the______ is at the core of the valuation process

• Debt-equity ratio
• Swap Ratio
• EBIT
• Earnings per share

Question No.28

If the Current dividend is Rs. 20, share price is Rs. 150 and annual dividend growth rate is 10 Percent per annum. Calculate the rate of return as per Gordon growth model.

• 14.67 Percent
• 26.67 Percent
• 13.33 Percent
• 10 Percent

Question No.29

Faimess opinion issued by_______ on the scheme of amalgamation shall be filed along with scheme of amalgamation.

• Bankers
• Auditors
• Merchant Banker
• Directors

Question No. 30

Who may order for amalgamation of Companies under section 237 of the Companies Act, 2013, if it is satisfied that such amalgamation is in public interest?

• Registrar of Companies
• NCLT
• Central Government
• Competition Commission of India

Question No.31

_________ gives the holder the right to buy the shares at a predetermined period of time and at a predetermined price under which the price of the underlying stock is expected to rise.

• Derivative
• Call option
• Put-option
• Future contact

Question No.32

As per rule 25 of the Companies (Companies, Arrangements and Amalgamations) Rules, 2016, the notice of the meeting to file members and creditors under section 233 of the Company Act, 2013 shall be accompanied by declaration of solvency in_______

• Form No. CAA 10
• Form No. CAA 11
• Form No. CCA 9
• Form No. CAA 12

Question No.33

Return of buy-back of a listed company shall be filed with_______ within________ days of such completion.

• Registrar, Thirty
• SEBI, Thirty
• Registrar and SEBI; Thirty
• Registrar and SEBI; Fifteen

Question No.34

Section 53 Insolvency and Bankruptcy Code, 2016 deals with distribution of assets in liquidation. In case of liquidation, which one is the correct order for distributing the assets?

• • Fees of insolvency professional
  • Employee wages,
  • Workmen’s dues for preceding 24 months and security creditors.
  • Unsecured creditors

• • Fees of insolvency professional
  • Workmen’s dues for preceding 24 months and security creditors.
  • Shareholders
  • Unsecured creditors

• • Fees of insolvency professional
  • Workmen’s dues for preceding 24 months and security creditors.
  • Employee wages
  • Unsecured creditors

• • Fees of insolvency professional
  • Workmen’s dues for preceding 24 months and security creditors.
  • Shareholders
  • Governments dues

Question No.35

What type of body is Competition Commission of India (CCI)?

• Administrative body
• Judicial body
• Quasi-judicial body
• Tribunal

Question No. 36

Appointment of _________ is mandatory for monitoring the compliance of the securities laws and for redressal of investors grievances in case of IPO by issuer company.

• Merchant Banker
• Registrar to issue
• Underwriters to the issue
• Compliance Officer

Question No.37

The Financial Creditor shall file_______ with NCLT to initiate insolvency proceedings against the Corporate Debtor.

• Form 5
• Form 1
• Form 2
• Form 3

Question No.38

Choose correct options, during the period of moratorium, the debtor shall

• Dispose of or alienate any of his assets;
• Not inform his business partners that he is undergoing a fresh start process,
• Not travel outside India expect with the permission of the Adjudicating Authority
• Act as a director of any company, or directly or indirectly take part in or be concerned in the promotion, formation or management of a company,

Question No.39

Small companies are required to conduct only________ in a year whereas private limited companies not classified as small companies have to conduct four board meetings in a year.

• 1 board meeting
• 2 board meetings
• 3 board meetings
• 4 board meetings

Question No.40

The Manager to the open offer shall file a report with the Board (SEBI) within______ from the expiry of the tendering period.

• Twelve working days
• Fifteen working days
• Twenty one working days
• Twentey six working days

Question No.41

A Practicing Company Secretary can be appointed as a Technical Member of NCLT, provided he has_________ working experience as secretary in whole-time practice.

• 15 Years
• 10 Years
• 20 Years
• 8 Years

Question No.42

“Which Committee proposed significant charges to make the restructuring and liquidation process speedier, efficient and effective and accordingly amendments were made to (RDDBFI) Act, 1993 and (SARFAESI) 2002?

• Narasimham Committee||
• Tiwari Committee
• J JIrani Committee
• Bankruptcy Law Reforms committee (BLRC)

Question No. 43

______________ is not a Debt Recovery Appellate Tribunal (DRAT)

• DRAT Delhi
• DRAT Mumbai
• DRAT Jaipur
• DRAT Allahabad

Question No.44

Which of the following persons/ authorities is not entitled to receive a notice of a meeting convened by the order of NCLT in respect of a scheme of amalgamation?

• Members or a class of members
• Auditor
• Income-Tax Authorities
• Central Government

Question No.45

Capital reduction, in simple words, means________

• Cancellation of paid-up capital
• Cancellation of subscribed capital
• Cancellation of uncalled capital
• Cancellation of authorized capital

Question No.46

Which one of the following is not a current asset?

• Stock of raw material
• Cheques not yet cleared
• Preliminary expenses
• Marketable Shares shown as Stock

Question No.47

Where all financial creditors are related parties of the corporate debtor the committee of creditors shall comprise of________

• All debentureholders
• Insolvency resolution professional and authorized representative
• 18 largest operational creditors by value and one representative each of workman and of employees
• All of the above

Question No.48

A company has authorized and paid-up capital of Rs 1, 00,000. The Company further wants to issue new equity shares for cash through preferential offer. What is the immediate action that the Company shall take w.r.t capital?

• Consolidation of share capital
• Reduction of share capital
• Increase in authorized share capital
• Sub-division of share capital

Question No.49

Who among the following constitutes the committee of creditors under Insolvency and Bankruptcy Code 2016?

• Insolvency professional
• Financial or operational creditor
• Interim resolution professional
• Adjudicating Authority

Question No.50

______ is a merger in which a private company becomes a public company by acquiring it

• Reverse merger
• Conglomeration
• Divestiture
• Demerger

Download : 1-50 MCQ Questions

https://www.mca.gov.in/content/mca/global/en/home.html

1. Expeditious adjudication and recovery of Debts: The object of the Act is expeditious adjudication and recovery of debts due to banks and financial institutions and to deal with matters connected therewith or incidental thereto.
2. Creation of Special Tribunals: In regards to the above, the act provides for creation of special Tribunals, by central government, called as the Debt recovery Tribunals( DRT).
3. Setting up of a Debt Recovery Tribunal:  The setting up of a Debt Recovery Tribunal is dependent upon the volume of cases. higher the number of cases within a territorial area, more the DRT would be set up. On the Other hand, there are number of states that do not have Debt Recovery Tribunals.
4. Setting up of appellate body to DRT: This Act also provides for setting up of appellate body to DRT, known as Debt Recovery Appellate Tribunal (DRAT).
5. These DRT were unshackled from the rigors of cumbersome procedures prescribed under the CPC. Instead, the DRT were empowered to frame their own procedures of practices.

with a view to help Banks and Financial Institutions recovers their bad debts quickly and efficiently, the Government of India has constituted 33 ( thirty three) Debt Recovery Tribunals and 5 ( five) Debt Recovery Appellate Tribunals all over the country.

Note: It may be noted that after the enactment of the Securitization and Reconstruction of financial assets and Enforcement of Security Interests Act ( SARFAESI Act) borrowers could become first applicants before the Debt Recovery Tribunals. Earlier only Lenders( Banks and Financial Institutions) could be applicants.

Composition of DEBT RECOVERY TRIBUNAL

1. DRT shall consist of One (1) Person only, to be called the Presiding Officer.
2. Any person who has been, or is qualified to be, a District Judge may be appointed as the Presiding Officer, who shall, hold office for a term of 5 years, or until he attains the age of 65 years, whichever is earlier.
3. Each Debt Recovery Tribunal has two(2) Recovery Officers.
4. The work amongst the Recovery Officers is allocated by the Presiding Officer.

JurisDiction of DEBT RECOVERY TRIBUNAL

The jurisdiction of DRT can be discussed under the following two criteria:

1. Pecuniary Limits: The DRT can entertain complaints only where the amount of debt due to any bank or financial institution or to a consortium of banks or financial institution is Rs. 10 Lakhs or more.
2. The DRT can entertain complaints if any of the defendants ordinarily resides or carries business or personally works for gain or has a branch office; or the cause of action arises within the local limits of its jurisdiction.

Recovery of DEBT Determined by DEBT RECOVERY TRIBUNAL

Modes of Recovery of Debts:

As per the Provisions of Section 25, the Recovery officer shall, on receipt of the copy of the certificate u/s 19, proceed to recover the amount of debt specified in the certificate by one or more of the following modes, namely:

• Attachment and sale of the movable or immovable property of the defendant;
• Arrest of the defendant and his detention in prison.
• Appointing a receiver for the management of the movable or immovable properties of the defendant.

Validity of Certificate and amendment thereof:

The Defendant cannot dispute before the Recovery Officer the correctness of the amount specified in the certificate, and no objection to the certificate in any other ground, shall also be entertained by the Recovery Officer. However, the Presiding Officer shall have power to withdraw the certificate or correct any clerical or arithmetical mistake in the certificate by sending intimation to the Recovery Officer. The Presiding Officer shall intimate to the Recovery Officer any order withdrawing or cancelling a certificate or any correction made by him.

Right to Legal Representation and Presenting Officers:

A Bank or a Financial Institution making an application to a Tribunal or an appeal to an appellate Tribunal may authorised one or more legal practitioners or any of its officers to act as Presiding Officers and every person so authorised by it may present its case before the Tribunal or the Appellate Tribunal. The defendant may either appear in person or authorise one or more legal practitioners or any of his or its officers to present his or its case before the Tribunal or the Appellate Tribunal.

LIMITATION The provisions of the Limitation Act, 1963, shall, as far as may be, apply to an application made to DRT.

Merger may be

1. Horizontal Merger – It is a merger of two or more companies that compete in the same industry. It expands as he firm’s operation in the same industry. hence, it is a merger with a direct competitor. Horizontal mergers are designed to achieve economics of scale and result in reducing the number of competitors in the industry.
2. Vertical Merger – It is a merger which takes place upon the combination of two companies which are operating in the same industry but at different stages of production or distribution system.
3. Congeneric Merger – It is the type of merger, where two companies are in the same or related industries but do not offer the same products, but related products and may share similar distribution channels, providing synergies for the merger.
4. Conglomerate Merger – these mergers are merger of different kinds of businesses under one flagship company. conglomerate mergers involve firms engaged in unrelated type of activities i.e. the business of two companies are not related  to each other horizontally or vertically.