IBBI allows Professional Entities to Enroll as Insolvency Professionals

The Insolvency and Bankruptcy Board of India (IBBI) has amended its regulations to allow professional entities to enroll as Insolvency Professionals via issuing Notification.

The Notification Stated, “In exercise of the powers conferred by sections 196, 203 and 205 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following regulations further to amend the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016, namely:-

These regulations may be called the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2022.

They shall come into force on the date of their publication in the Official Gazette.”

While amending Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016:-

A new provision introduced, (i) in clause 9,

(a) the existing clause shall be renumbered as “9. (1)”,

(b) after sub-clause (1), the following shall be inserted, namely: –

“(2) No insolvency professional entity, recognised by the Board under regulation 13 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, shall be enrolled as a professional member if it is not eligible to be registered as an insolvency professional with the Board.”

(ii) in clause 10, in sub-clause (1), for the words “an individual”, the words “an individual or an insolvency professional entity recognised by the Board under regulation 13 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016” shall be substituted. (iii) in clause 12, in sub-clause (1), after item (fa), the following shall be inserted, namely:-

“(fb) details of the partners or directors, as the case may be, where the professional member is an insolvency professional entity;”

(iv) in clause 12A,

(a) in sub-clause (2), for the words “he”, the words “the professional member”, shall be substituted.

(b) after the sub-clause (2), the following proviso shall be inserted, namely:-

“Provided that the item (c), item (e) and item (g)(iii) shall not be applicable for a professional member, which is an insolvency professional entity registered as an insolvency professional.”

(v) in sub-clause (8) of clause 10, sub-clause (7) of clause 12A, sub-clause (1) of clause 13, sub-clause (b) of clause 20, sub-clause (1) of clause 26, clause 27, clause 28 and clause 30, for the word “his”, the word “its” shall be substituted.

(vi) in sub-clause (1) of clause 12, sub-clause (2) of clause 12A, and clause 20, for the word “him”, the word “it” shall be substituted.