ICAI, ICSI float companies to join the insolvency framework under the new bankruptcy code
Short Title and Commencement
The Institute of Chartered Accountants of India (ICAI) and the Institute of Company Secretaries of India (ICSI) are in the process of registering the first Insolvency professional agencies (IPA).
Both professional bodies have floated Section 8 (not-for-profit) companies with their registered members as directors, leaders of these bodies told. “We have registered a company with three of the council members as directors. We have applied for registration with IBBI (Insolvency and Bankruptcy Board of India),” said M Devaraja Reddy.
Information At a Glance
Insolvency and Bankruptcy (Registration of Insolvency Professionals) Regulations, 2016
In exercise of the powers conferred by sub-sections (1)(a) to (c) of section 196 and section 207 read with sub-sections (1) and (2) (zzh) to (zzi) of section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Board hereby makes the following Regulations, namely -
1. (1) These Regulations may be called the Insolvency and Bankruptcy (Registration of Insolvency Professionals) Regulations, 2016.
(2) These Regulations shall come into force on the date of their publication in the Official Gazette.
Insolvency Professionals Examination
3. The Board shall form an Examination Committee to conduct an Insolvency Professionals Examination to test the practical skills and knowledge of insolvency, bankruptcy and allied subjects, of individuals seeking to be registered as insolvency professionals.
4. Subject to any regulations made or directions issued by the Board, the Examination Committee shall -
(a) determine the manner of conducting the Insolvency Professionals Examination;
(b) appoint persons to act as examiners or evaluators;
(c) establish a procedure for the declaration of results;
(d) make recommendations to the Board for developing and revising the curriculum of the Insolvency Professional Examination;
(e) create a grievance redressal mechanism for the purpose of the Insolvency Professionals Examination; and
(f) exercise any other functions assigned to it by the Board.
5. The Board shall notify the curriculum of the Insolvency Professionals Examination from time to time on the basis of the recommendations of the Examination Committee;
6. Without prejudice to Regulations 3, 4 and 5, the Board shall conduct the first Insolvency Professionals Examination within two years from the date of its constitution.
Eligibility to apply for certificate of transitional registration
7. No individual seeking to practice as an insolvency professional under the Code shall apply for a certificate of transitional registration, if -
(a) he has been convicted by any competent court for an offence punishable with imprisonment for a term exceeding six months or for an offence involving moral turpitude or any economic offence, and a period of five years has not elapsed from the date of expiry of the sentence:
Provided that if a person has been convicted of any offence and sentenced in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to apply for a certificate of registration or a certificate of transitional registration;
(b) he is an undischarged insolvent, or has applied to be adjudicated as an insolvent;
(c) he has been declared to be of unsound mind;
(d) he is a minor;
(e) he is not a fit and proper person;
(f) he is not a person resident in India.
Explanation: For the purpose of these Regulations, a person shall be construed to be fit and proper by taking into account any criteria the Board deems fit, including but not limited to the following criteriaa.
c. good reputation and character, and
d. efficiency and honesty.
Application for Transitional Registration
8. (1) Without prejudice to the registration process envisaged under Regulations 11, 12 and 13, the Board shall invite applications for transitional registration under this Regulation.
(2) Any individual may be eligible to make an application to receive a certificate of transitional registration to the Board in accordance with this Regulation, if -
(a) he has received a Bachelor’s Degree from any University established by law, whether in India or abroad;
(b) has, for a period not less than fifteen years, been