What is the primary purpose of the Insolvency and Bankruptcy Code (IBC), 2016?
Show answer & explanation
Correct answer: C
Explanation
Answer: To simplify the process of resolving financial distress in businesses
Explanation: The primary purpose of the Insolvency and Bankruptcy Code, 2016 is to provide a time-bound and efficient mechanism for resolving insolvency and bankruptcy cases of companies and individuals. It aims to maximize asset value, promote credit discipline, and ensure quicker resolution of financial distress in businesses.
Additional Key Facts
IBC was enacted in 2016 in India.
It applies to companies, partnerships, and individuals.
Insolvency resolution is time-bound (generally 180–330 days).
The Insolvency and Bankruptcy Board of India (IBBI) regulates the process.
It helps improve ease of doing business and credit recovery.
Potential Exam-Oriented Questions & Answers
Question: What is the main objective of IBC?
Answer: Timely resolution of insolvency and bankruptcy cases
Question: Who does the IBC apply to?
Answer: Companies, partnerships, and individuals