Preferential Transaction

A transaction made by a corporate debtor within the look-back period (2 years for related parties, 1 year for others) that gives a creditor more than they would receive in liquidation. Can be reversed by the liquidator or RP under Section 43 of IBC.

Preferential Transaction is governed by the Insolvency and Bankruptcy Code, 2016 and regulated by IBBI. Understanding this concept is essential for ensuring regulatory compliance, avoiding penalties, and making informed corporate decisions in India.

Preferential Transaction is relevant for company secretaries, compliance officers, chartered accountants, corporate lawyers, board members, and all professionals dealing with IBC regulatory matters in India.