100+ Free IBBI Limited Insolvency Practice Questions

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2026 Statistics

Key Facts: IBBI Limited Insolvency Exam

100

Total Marks (MCQ paper)

IBBI Syllabus

120 mins

Exam Duration

IBBI LIE

60%

Passing Mark

IBBI LIE Rules

0.25

Negative Mark per Wrong Answer

IBBI LIE Rules

₹5,900

Exam Fee (incl. GST)

IBBI Portal

10 Years

Min. experience for IP registration

IBBI Regulations

The IBBI Limited Insolvency Exam has a 2-hour limit, is an objective MCQ paper for 100 marks, and carries a negative marking of 25%. A minimum score of 60% is required to pass. The exam costs ₹5,900 per attempt and focuses heavily on the Insolvency and Bankruptcy Code (IBC) 2016, corporate insolvency (CIRP), liquidation waterfalls, and supporting corporate and debt recovery laws.

Sample IBBI Limited Insolvency Practice Questions

Try these sample questions to test your IBBI Limited Insolvency exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1What is the minimum threshold of default required to initiate the Corporate Insolvency Resolution Process (CIRP) under Section 4 of the Insolvency and Bankruptcy Code, 2016, as per the current notification?

A.₹1 Crore

B.₹1 Lakh

C.₹10 Lakhs

D.₹5 Crores

Explanation: Under Section 4 of the Insolvency and Bankruptcy Code, 2016, the Central Government, via a notification in March 2020, increased the minimum amount of default required to initiate CIRP from ₹1 Lakh to ₹1 Crore. This was done primarily to prevent MSMEs from being dragged into insolvency during economic stress.

2Under Section 7 of the IBC, 2016, who among the following is entitled to file an application for initiating CIRP against a corporate debtor?

A.An Operational Creditor

B.A Financial Creditor

C.The Corporate Debtor itself

D.A shareholder of the Corporate Debtor

Explanation: Section 7 of the Insolvency and Bankruptcy Code, 2016, specifically allows a Financial Creditor (either by itself or jointly with other financial creditors) to file an application for initiating CIRP against a corporate debtor before the Adjudicating Authority (NCLT) when a default has occurred.

3What is the mandatory timeline for the completion of the Corporate Insolvency Resolution Process (CIRP) under Section 12 of the IBC, including any extensions and litigation periods?

A.180 days

B.270 days

C.330 days

D.120 days

Explanation: Under Section 12 of the IBC, CIRP must be completed within a period of 180 days. A one-time extension of up to 90 days may be granted, but the amendment to Section 12 mandates that the process, including any extension and time taken in legal proceedings, must be completed within a maximum period of 330 days from the insolvency commencement date.

4For a corporate debtor that is an MSME, what is the default threshold required to initiate a Pre-packaged Insolvency Resolution Process (PPIRP) under Section 54A?

A.₹1 Lakh

B.₹50 Lakhs

C.₹1 Crore

D.₹10 Lakhs

Explanation: Under Section 54A of the IBC, introduced via amendment in 2021, the Pre-packaged Insolvency Resolution Process (PPIRP) can be initiated for corporate debtors classified as MSMEs. The minimum default threshold notified by the government for PPIRP is ₹10 Lakhs.

5Under Section 14 of the IBC, which of the following is NOT suspended or prohibited by the declaration of a moratorium by the Adjudicating Authority?

A.The institution of suits or continuation of pending suits against the corporate debtor

B.The supply of essential goods or services to the corporate debtor as may be specified

C.Any action to foreclose, recover or enforce any security interest created by the corporate debtor

D.The recovery of any property by an owner or lessor where such property is occupied by the corporate debtor

Explanation: Section 14(2) of the Code states that the supply of essential goods or services to the corporate debtor as may be specified shall not be terminated or suspended or interrupted during the moratorium period. Moratorium suspends suits, enforcement of security interest, and recovery of occupied properties to keep the corporate debtor as a going concern.

6In a Committee of Creditors (CoC), the total outstanding financial debt of a corporate debtor is ₹120 Crores. Creditor A (Secured) holds ₹50 Crores, Creditor B (Secured) holds ₹40 Crores, and Creditor C (Unsecured related party) holds ₹30 Crores. What is the voting share of Creditor A in the CoC?

A.41.67%

B.45.45%

C.55.56%

D.50.00%

Explanation: According to the proviso to Section 21(2) of the IBC, a financial creditor that is a related party of the corporate debtor does not have any right of representation, participation, or voting in a Committee of Creditors. Therefore, Creditor C's debt of ₹30 Crores is excluded from the voting pool. The total voting debt is ₹90 Crores (₹50 Crores + ₹40 Crores). Creditor A's voting share is (50 / 90) * 100 = 55.56%.

7What is the minimum voting threshold required in the Committee of Creditors (CoC) to approve a resolution plan under Section 30(4) of the IBC?

A.51% of voting share

B.75% of voting share

C.90% of voting share

D.66% of voting share

Explanation: Under Section 30(4) of the IBC, the Committee of Creditors may approve a resolution plan by a vote of not less than 66% of the voting share of the financial creditors, after considering its feasibility, viability, and manner of distribution.

8Who is responsible for the management of the affairs of the corporate debtor and exercising the powers of its board of directors upon the appointment of the Interim Resolution Professional (IRP)?

A.The Interim Resolution Professional (IRP)

B.The promoter of the Corporate Debtor

C.The Adjudicating Authority (NCLT)

D.The Committee of Creditors (CoC)

Explanation: Under Section 17 of the IBC, from the date of appointment of the IRP, the management of the affairs of the corporate debtor vests in the IRP, and the powers of the board of directors or the partners of the corporate debtor stand suspended and are exercised by the IRP.

9Which section of the IBC, 2016, permits the withdrawal of an application admitted under Section 7, 9, or 10, provided it has the approval of 90% of the voting share of the CoC?

A.Section 33

B.Section 18

C.Section 12A

D.Section 29A

Explanation: Section 12A was inserted by the 2018 amendment to allow the Adjudicating Authority to permit the withdrawal of an application admitted under Section 7, 9, or 10, upon an application made by the applicant with the approval of 90% voting share of the Committee of Creditors.

10Which of the following persons is eligible to submit a resolution plan under Section 29A of the IBC?

A.An undischarged insolvent

B.A person who has been convicted for any offense punishable with imprisonment for two years or more under specified acts

C.A person who is a related party of an eligible resolution applicant

D.A person who is a promoter of an MSME corporate debtor undergoing CIRP, seeking to resolve the MSME itself

Explanation: Section 240A of the IBC provides an exemption for MSMEs from certain clauses of Section 29A. Specifically, the promoters of an MSME corporate debtor are not disqualified under clauses (c) and (h) of Section 29A, making them eligible to submit a resolution plan for their own MSME, provided they are not otherwise disqualified under other clauses.

About the IBBI Limited Insolvency Exam

The Limited Insolvency Examination is a high-stakes professional exam conducted by the Insolvency and Bankruptcy Board of India (IBBI). Passing this exam is a statutory prerequisite for registering as an Insolvency Professional (IP) in India under the Insolvency and Bankruptcy Code, 2016 (IBC). The syllabus is highly technical, encompassing the full text of the IBC 2016, rules and regulations governing CIRP, liquidation, PPIRP, fast-track insolvency, information utilities, and personal insolvency. Additionally, the exam tests knowledge of allied commercial and debt-recovery laws including the Companies Act 2013, SARFAESI Act, RDB Act, Limitation Act, Contract Act, Partnership Act, and LLPs, alongside basic corporate finance, accounts, and landmark judicial decisions of the Supreme Court and NCLAT.

Assessment

Objective MCQ paper for 100 marks, online proctored CBT (question count varies by phase; e.g., 87 questions historically, case-study comprehensions under the Phase 10 syllabus effective 1 Oct 2026)

Time Limit

2 hours

Passing Score

60% (60 out of 100 marks)

Exam Fee

₹5,900 (Insolvency and Bankruptcy Board of India (IBBI))

IBBI Limited Insolvency Exam Content Outline

60%

Insolvency and Bankruptcy Code, 2016 (IBC)

Corporate Insolvency Resolution Process (CIRP), Pre-Packaged Insolvency (PPIRP), Fast Track CIRP, Liquidation, Individual Insolvency, and Bankruptcy.

15%

Rules and Regulations under the IBC

IBBI Regulations covering CIRP, liquidation, insolvency professionals, information utilities, and fast-track processes.

15%

Allied Business and Commercial Laws

Relevant chapters of the Companies Act 2013, Indian Contract Act 1872, Partnership Act 1932, LLP Act 2008, and Negotiable Instruments Act 1881.

Debt Recovery and Securitisation Laws

Provisions of the SARFAESI Act 2002 and the Recovery of Debts and Bankruptcy (RDB) Act 1993, including DRT and DRAT procedures.

General Laws, Finance, and Corporate Accounts

Limitation Act 1963, Prevention of Money Laundering Act 2002, valuation rules, and basic corporate financial statement analysis.

How to Pass the IBBI Limited Insolvency Exam

What You Need to Know

Passing score: 60% (60 out of 100 marks)
Assessment: Objective MCQ paper for 100 marks, online proctored CBT (question count varies by phase; e.g., 87 questions historically, case-study comprehensions under the Phase 10 syllabus effective 1 Oct 2026)
Time limit: 2 hours
Exam fee: ₹5,900

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

IBBI Limited Insolvency Study Tips from Top Performers

1Thoroughly read the bare act of the Insolvency and Bankruptcy Code, 2016, with all up-to-date amendments.

2Understand the key voting thresholds in the Committee of Creditors (e.g., 51% for routine decisions, 66% for critical decisions like plan approval, and 90% for withdrawal under Section 12A).

3Memorize the precise order of priority in the Section 53 liquidation waterfall, as this is heavily tested both conceptually and via distribution calculations.

4Practice calculation questions on asset distribution and outstanding financial debt ratio calculations.

5Track recent landmark Supreme Court of India judgments on insolvency law (e.g., Swiss Ribbons, Essar Steel, Committee of Creditors of Essar Steel, etc.).

6Understand the strict timelines for CIRP (180 + 90 days, maximum 330 days) and PPIRP (120 days total).

7Revise the specific provisions of the SARFAESI Act, 2002 (notice under Section 13(2), possession, CERSAI) and RDB Act, 1993.

Frequently Asked Questions

What is the passing score and format of the IBBI Limited Insolvency Exam?

The exam is an objective multiple-choice paper carrying a total of 100 marks, and you have 2 hours to complete it. The passing score is 60%. There is a negative marking of 25% of the marks assigned to a question for each wrong answer, making careful selection critical. The number of questions varies by syllabus phase (for example, 87 questions historically), and the Phase 10 syllabus effective 1 October 2026 is heavily case-study based.

Who is eligible to write the exam and register as an Insolvency Professional?

While anyone can write the exam, to register as an Insolvency Professional, you must have passed the exam within the last 12 months and possess either: 10 years of post-qualification experience as a CA, CS, CMA, or Advocate, or 10 years of experience in a managerial capacity after a postgraduate degree, or 15 years of experience after a graduate degree.

What is the cost of the examination?

The examination registration fee is ₹5,900 (inclusive of GST) per attempt. If a candidate does not pass, they must pay the same fee of ₹5,900 for any subsequent attempt.

What are the major laws tested in this exam?

The primary focus is the Insolvency and Bankruptcy Code (IBC) 2016 and its detailed rules and regulations (covering CIRP, Liquidation, Information Utilities, and PPIRP). The exam also covers relevant chapters of the Companies Act 2013, Indian Contract Act 1872, Partnership Act 1932, LLP Act 2008, SARFAESI Act 2002, RDB Act 1993, Limitation Act 1963, and basic financial analysis.

Are there any calculation-based questions?

Yes. The exam frequently includes questions requiring calculations, particularly around the Section 53 liquidation waterfall distribution, Committee of Creditors (CoC) voting shares based on outstanding financial debt, timelines (computing days excluding specific periods), and basic financial ratios.