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      Question

      Under the IBC, which of the following is NOT a condition

      for MSMEs to qualify for insolvency resolution?
      A The MSME must be a registered entity with a valid business license Correct Answer Incorrect Answer
      B The MSME must have defaulted on its debts Correct Answer Incorrect Answer
      C The MSME must have liabilities greater than β‚Ή1 crore Correct Answer Incorrect Answer
      D The MSME must demonstrate a viable business plan for restructuring Correct Answer Incorrect Answer
      E The MSME must have been in continuous operation for at least 5 years Correct Answer Incorrect Answer

      Solution

      Under the IBC, there is no requirement for MSMEs to have been in continuous operation for a specific period. The key criteria for initiating the insolvency process are defaulting on debts and meeting the β‚Ή1 crore default threshold. MSMEs can qualify for resolution or liquidation even if they have been operational for a short period.

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