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      Question

      What happens when a moratorium is declared under Section

      14 of the IBC?
      A The company must stop all production and shut down its operations immediately Correct Answer Incorrect Answer
      B A temporary legal freeze is placed; no one can sue the company or seize its property Correct Answer Incorrect Answer
      C The bank is given full authority to auction the assets outside the tribunal Correct Answer Incorrect Answer
      D The company’s equity shares are automatically canceled Correct Answer Incorrect Answer
      E The government takes over 100% ownership of the company Correct Answer Incorrect Answer

      Solution

      A moratorium acts as a "freeze" on the company where no one can sue it, seize property, or enforce any security, allowing time to find a resolution plan.

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