Section 17 of IBC : Section 17: Management Of Affairs Of Corporate Debtor By Interim Resolution Professional

Explanation using Example

Imagine a company, XYZ Pvt. Ltd., is unable to repay its debts and its creditors have initiated insolvency proceedings against it. Under Section 17 of the Insolvency and Bankruptcy Code, 2016, once the insolvency process begins, the following scenario unfolds:

An interim resolution professional (IRP) is appointed by the National Company Law Tribunal (NCLT). From the date of their appointment:

• The IRP takes over the management of XYZ Pvt. Ltd., effectively stepping into the shoes of the current directors and managers.
• The existing board of directors loses its power to make decisions for the company, and all such powers are now exercised by the IRP.
• Employees of XYZ Pvt. Ltd., including its officers and mana...

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