Know all about insolvencyprofessional agencies

KNOW ALL ABOUT INSOLVENCY
PROFESSIONAL AGENCIE
INSOLVENCY PROFESSIONAL AGENCIES
Sections 199 to 205
By ADV. ANUJ PANDEY, L. L. B,
CS (PRO.), B.COM (HONS), ADCA,
NCFM, MOB. NO. 9555613873,
EMAIL-
anujpandey1010@gmail.com

Registration mandatory - to function as IPA –
Sec 199
Description
A certificate of registration from Board is necessary for a person to operate
as an IPA and carry out following functions
(a)Carrying on business as IPA
(b)Enrollment of Insolvency Professionals as its members

Principles governing registration of insolvency professional
agency - Section 200
The Board shall have regard to the following principles while registering the
insolvency professional agencies under this Code, namely
to promote the professional development of and regulation of
insolvency professionals
to promote the services of competent insolvency professionals to cater
to the needs of debtors, creditors and such other persons as may be
specified

To promote good professional and ethical conduct amongst insolvency
professionals
To protect the interests of debtors, creditors and such other persons as
may be specified
To promote the growth of IPA for the effective resolution of insolvency and
bankruptcy processes under this Code.
Principles governing registration of IPA – Sec. 200

Steps for registration as IPA – Sec. 201
Description
Every application for registration shall be made to the Board in such form and
manner, containing such particulars, and accompanied by such fee, as may be
specified by regulations:
Provided that every application received by the Board shall be acknowledged
within seven days of its receipt.

Description
On receipt of the application, the Board may on being satisfied that the application
conforms with all requirements, grant a certificate of registration to the applicant
or else, reject, by order, such application:
Provided that no order rejecting the application shall be made without giving an
opportunity of being heard to the applicant:
Provided further that every order so made shall be communicated to the applicant
within a period of fifteen days.
Steps for registration as IPA – Sec. 201

Issue Certificate - The Board may issue a certificate of registration
to the applicant in such form and manner and subject to such terms
and conditions as may be specified.
Renew - The Board may renew the certificate of registration from
time to time in such manner and on payment of such fee as may be
specified
What are the steps for registration as an
insolvency professional agency - Section 201

Description
• The Board may, by order, suspend or cancel the certificate of registration
granted to an IPA on any of the following grounds, namely:—
(a) that it has obtained registration by making a false statement
or misrepresentation or by any other unlawful means;
(b) that it has failed to comply with the requirements of the regulations
made by the Board or bye-laws made by the IPA
What are grounds for suspension or cancellation
of registration for an IPA- Section 201

Description
(c) that it has contravened any of the provisions of the Act or the rules or th
regulations made thereunder
(d) on any other ground as may be specified by regulations
Provided that no order shall be made under this sub-section unless the
IPA concerned has been given a reasonable opportunity of being heard:
Provided further that no such order shall be passed by any member
except whole-time members of the Board.
What are grounds for suspension or cancellation
of registration for an IPA- Section 201

What are the remedies to an IPA when
aggrieved by Board’s order – Section 202
Any IPA which is aggrieved by the order of the Board made
under section 201 may prefer an appeal to the NCLAT in
such form, within such period, and in such manner, as may
be specified by regulations.

What are the aspects covered by the Governing
Board of insolvency professional agency – Section
203
Power of Board to make regulations
• The Board in order to achieve the objectives sought under the Code can make
regulations in respect of the following
(a) the setting up of a governing board of an IPA
(b) the minimum number of independent members to be on the governing
board of the IPA and
(c) the number of the insolvency professionals being its members who shall
be on the governing board of the IPA.
• The objective for a governing board for an insolvency professional agency is that
the governing board will be responsible for the operations and overall
management of the IPA

Describe the functions of insolvency
professional agencies - Section 204
Description
An insolvency professional agency shall perform the following functions,
(a)Grant membership to persons who fulfil all requirements set out in its byelaws
on payment of membership fee
(b)Lay down standards of professional conduct for its members
(c)Monitor the performance of its members
(d)Safeguard the rights, privileges and interests of insolvency professionals who
are its members

Descriptions
• Suspend or cancel the membership of insolvency professionals who are its
members on the grounds set out in its bye-laws
• Redress the grievances of consumers against insolvency professionals who are its
members; and
• Publish information about its functions, list of its members, performance of its
members and such other information as may be specified by regulations
Describe the functions of insolvency
professional agencies - Section 204

Insolvency professional agencies to make bye-
laws - Section 205
Description
Subject to the provisions of this Code and any rules or regulations made
thereunder and after obtaining the approval of the Board, every IPA shall make
bye-laws consistent with the model bye-laws specified by the Board under section
196.

Module:
IBBI ( MODEL BYE LAWS AND GOVERNING BODY OF
INSOLVENCY PROFESSIONAL AGENCIES)
REGULATIONS 2017
21 NOV 2016

Insolvency professional agencies to have Bye-
Laws
Regulation 3
A company shall submit to the Board its bye-laws along with the application for its
registration as an insolvency professional agency
The bye-laws shall provide for all matters specified in the model bye-laws and at all
times be consistent with the model bye-laws
The insolvency professional agency shall publish its bye-laws, the composition of all
committees formed, and all policies created under the bye-laws on its website

Regulation 4
The Governing Board may amend the bye-laws by a resolution passed by votes in
favor being not less than three times the number of the votes, if any, cast against
the resolution, by the directors
The insolvency professional agency shall file a printed copy of the amended bye-
laws with the Board within fifteen days from the date when such amendment is
made effective
Amendment of Bye-Laws

Module:
IBBI ( INSOLVENCY PROFESSIONAL AGENCIES)
REGULATIONS , 2016
21 NOV 2016

Regulation 3
Eligibility for
registration
No person shall be eligible to be registered as an insolvency
professional agency unless it is a company registered under section
8 of the Companies Act, 2013, and
(a) its sole object is to carry on the functions of an insolvency
professional agency under the Code;
(b) it has bye-laws and governance structure in accordance with the
Insolvency and Bankruptcy Board of India
(Model Bye-Laws and Governing Board of Insolvency Professional
Agencies), 2016;
(c) it has a minimum net worth of ten crore rupees;
(d) it has a paid-up share capital of five crore rupees,
(e) it is not under the control of person(s) resident outside India,
(f) not more than 49% of its share capital is held, directly or
indirectly, by persons resident outside India; and
Eligibility for registration

Regulation 3
Eligibility for
registration
- Itself, its promoters/ directors / persons holding ,ore than 10% shares
are fit and proper persons
For determining whether a person is fit and proper under these
Regulations, the Board may take account of any consideration as it
deems fit, including but not limited to the following criteria-
(i) integrity, reputation and character,
(ii) absence of convictions and restraint orders, and
(iii) competence including financial solvency and net worth
Eligibility for registration

Regulation 4
Application for
registration or
renewal thereof
• A company
• Application to the Board in Form A
• non refundable application fee of ten lakh rupees
Application for registration or renewal thereof

Regulation 4
Application for
registration or
renewal thereof
• opportunity to the applicant to remove the deficiencies, if
any, in the application
• submit, within reasonable time, additional documents,
information or clarification that it deems fit
• may require the applicant to appear, within reasonable
time, before the Board in person, or through its
authorized representative for clarifications required for
processing the application
Application for registration or renewal thereof

Regulation 5
Grant of
certificate of
registration
If the Board is satisfied, after such inspection or inquiry as it
deems necessary and having regard to the
principles specified in section 200 of the Code, that the
applicant:—
(a) is eligible under Regulation 3
(b) has adequate infrastructure to perform its functions
under the Code
(c) has in its employment, persons having adequate
professional and other relevant experience, to enable it to
perform its functions under the Code and
(d) has complied with the conditions of the certificate of
registration, if he has submitted an application for
renewal under Regulation 4
Grant of certificate of registration

Regulation 5
Grant of
certificate of
registration
• Based on which the Board may grant or renew a
certificate of registration
• The certificate of registration shall be valid for a period of
five years from the date of issue
Grant of certificate of registration and its validity

Regulation 5
Grant of
certificate of
registration
The registration shall be subject to the conditions that the
insolvency professional agency shall
(a) abide by the Code, rules, regulations, and guidelines thereunder
and its bye-laws
(b) at all times after the grant of the certificate continue to satisfy
the requirements under the regulation
(c) pay a fee of five lakh rupees to the Board, payable every year
after the year in which the certificate is granted or renewed
(d) seek approval of the Board when a person, other than a
statutory body, seeks to hold more than ten per cent, directly or
indirectly, of the share capital of the insolvency professional agency
(e) take adequate steps for redressal of grievances and
(f) abide by such other conditions as may be specified
Grant of certificate of registration

Regulation 6
Procedure for
rejecting
application
• After considering an application made under Regulation 4, the
Board is of the prima facie opinion the registration ought not be
granted or renewed, or be granted or renewed with additional
conditions, it shall communicate the reasons for forming such an
opinion and give the applicant an opportunity to explain why its
application should be accepted, within fifteen days of the receipt
of the communication from the Board, to enable it to form a final
opinion
• The communication shall be made to the applicant within forty
five days of receipt of the application, excluding the time given
by the Board for removing the deficiencies, presenting additional
documents, information or clarifications, or appearing in person,
as the case may be
Procedure for rejecting application

Regulation 6
Procedure for
rejecting
application
After considering the explanation, given by the applicant the
Board shall communicate its decision to-
(a) accept the application, along with the certificate of
registration, or
(b) reject the application by an order, giving reasons thereof
within thirty days of receipt of explanation.
Procedure for rejecting application

Disciplinary proceedings – Regulation 8
Board has sufficient
cause exists to take
action under
section 220
Issue show cause
notice to IPA at
registered office or
e-means
Enclose copies of
documents from
investigation report
Board to form a
Disciplinary
committee
DC to dispose the
matter within six
months from
receipt
Opportunity of
being heard to IPA
After consideration
DC shall pass orders
Order passed to be
issued to IPA
immediately
Orders to be
published in
website of the
website

Regulation 9
Appeal An appeal may be preferred under section 202 of the Code,
within a period of thirty days of receipt the impugned order in
the manner prescribed in Part III of the National Company Law
Tribunal Rules, 2016
Appeal

Regulation 10
Grant of in-
principle approval
• Any person who seeks to establish an insolvency professional agency may
make an application for an in principle approval, demonstrating that the
conditions are satisfied, along with a nonrefundable application fee of
ten lakh rupees
• If the Board is satisfied, after such inspection or inquiry as it deems
necessary, that
(a) the applicant is a fit and proper person; and
(b) the proposed or existing company which may receive registration would
be able to meet the requirements for grant of registration
it may grant in-principle approval which shall be valid for a period not
exceeding one year and be subject to such
conditions as it deems fit
• During the validity of in-principle approval, the company referred may
make an application for a certificate of registration as an insolvency
professional agency to the Board but shall not be required to pay the
application fees for registration.
Grant of in-principle approval

Registered IPA,s
• 1 Indian Institute of Insolvency Professionals of ICAI
Ist Floor, ICAI Building, Indraprastha Marg, New Delhi-110002 www.iiipicai.in
Sh.Sunil Pant 0120-3045960
• 2 ICSI Institute of Insolvency Professionals
3rd Floor, ICSI House 22 Institutional Area, Lodhi Road New Delhi-110003 www.icsiiip.com
CS Alka Kapoor 45341071, 45341018
• 3 Insolvency Professional Agency of Institute of Cost Accountants of India
4th Floor, CMA Bhawan, 3 Insititutional Area, Lodhi Road, New Delhi Ndelhi - www.ipaicmai.in
Dr. S K Gupta 011-24666141/120 ipa@icmai.in
Towards – IPE ,s - 95 got registered – Certificates for 40 were cancelled – Now – 55 all over India

THANKYOU
REGARDS: ADV. ANUJ PANDEY, L. L. B, CS
(PRO.), B.COM (HONS), ADCA, NCFM, MOB.
NO. 9555613873, EMAIL-
anujpandey1010@gmail.com

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