Moving ahead with the implementation of the Insolvency and Bankruptcy Code, Insolvency and Bankruptcy Board of India (IBBI) has notified two sets of regulations, the Model Bye-Laws and Governing Board of Insolvency Professional Agencies as well as those pertaining to Insolvency Professional Agencies.
Corporate Affairs Ministry said that these two regulations inter alia provide for the eligibility norms to be a professional member of an insolvency professional agency and also for eligibility norms to be registered with the IBBI as an insolvency professional agency. It added that the regulations related to insolvency professionals provide for registration, regulation and oversight of such people under the Code and will be effective from November 29, 2016.
Under the regulations, a firm registered under Section 8 of the Companies Act, 2013 having minimum net worth of Rs 10 crore would be eligible to be an insolvency professional agency. More than half of the directors of its board shall be independent directors and not more than one fourth of the directors shall be insolvency professionals. Besides, such an entity would have membership, monitoring, grievance redressal and disciplinary committees to regulate as well as have an oversight of the professional members. The Section 8 of companies Act is not for profit entities.
As per the government notification, the Insolvency and Bankruptcy Code seeks to consolidate and amend laws relating to reorganization as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.