IBBI notifies three sets of regulations under Bankruptcy Code

Advocates, chartered accountants company secretaries and cost accountants can serve as insolvency professionals subject to certain conditions, besides certain classes of not-for-profit companies that can act as insolvency professional agencies.
In this regard, regulations have been notified under the Insolvency and Bankruptcy Code that seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
Moving closer to implementing the Code, the Insolvency and Bankruptcy Board of India (IBBI) has notified three sets of regulations.
The notified norms pertain to Insolvency Professionals, Insolvency Agencies and Model Bye-Laws and Governing Board of Insolvency Professional Agencies.

The corporate affairs ministry today said the regulations related to insolvency professionals provide for registration, regulation and oversight of such people under the Code and will be effective November 29.
"Advocates, chartered accountants, company secretaries and cost accountants with 10 years of post-membership experience (practice or employment) or a graduate with 15 years of post-qualification managerial experience, on passing the Limited Insolvency Examination" will be eligible to act as insolvency professionals.

Any other individual passing the National Insolvency Examination will be eligible, the ministry said in a release.
Advocates, chartered accountants, company secretaries and cost accountants with over 15 years of practice experience may seek registration, without any examination.

However, such applications should be made by December 31 and such registration will be valid for six months.
A National Insolvency Examination as well as Limited Insolvency Examination will be conducted, the release said.
A limited liability partnership, a registered partnership firm and a company will be recognised as an insolvency professional entity provided a majority of the partners or majority of the whole-time directors are registered as insolvency professionals under the Code.
Among others, an insolvency professional may use the organisational resources of a recognised insolvency professional entity subject to certain conditions.
Meanwhile, a firm registered under Section 8 of the Companies Act, 2013 -- having minimum net worth of Rs 10 crore -- will be eligible to be an insolvency professional agency.

Such an entity would have membership, monitoring, grievance redressal and disciplinary committees to regulate as well as have an oversight of the professional members.
Generally, Section 8 companies are not-for-profit entities.
IBBI, chaired by M S Sahoo, will have 10 members.