Insolvency Professional Entities Framework has been streamlined by the IBBI to ensure efficient implementation of insolvency processes.
Regulatory framework for insolvency professional entities:
- The Insolvency and Bankruptcy Board of India (IBBI) aims to streamline the regulatory framework for insolvency professional entities (IPEs).
- It would ensure efficient implementation of processes by insolvency professionals (IPs).
Disciplinary Proceedings:
- IBBI clarified the process for initiating disciplinary proceedings in case of contraventions by an IPE.
- If a contravention occurs, the show cause notice can be issued to the IPE, and is authorized to act on behalf of the IPE for the specific assignment.
- If there are repeated instances of contravention involving one or more partners or directors, then the show cause notice can be served to the IPE itself.
Applicability Limit on Assignments:
- The norms restricting the number of assignments that can be undertaken by an individual IP will not apply to IPEs.
- This allows IPEs to take on a more flexible workload based on their institutional capacity.
Fee Structure:
- IBBI emphasized that the fee structure for IPEs should be market-determined and should reflect market rates based on the expanded role of IPEs.
- Given the institutional framework of IPEs and their ability to negotiate fees based on their resources and range of services, they are better positioned to determine their fees compared to individual IPs.
Implementation of Resolution Plan:
- IBBI clarified that IPs can render professional services related to the implementation of a resolution plan approved by the Adjudicating Authority (AA).
- The details of such services must be mentioned in the resolution plan approved by the AA to ensure transparency and accountability.
Billing/Invoicing Compliance:
- Bills or invoices for services availed by an IP from professionals can be raised in the name of the IPE, the individual professional, or the firm where the professional is a partner.
- This provides flexibility in billing arrangements while maintaining clarity in billing procedures.
About Insolvency and Bankruptcy Board of India (IBBI):
- It was established in 2016 under the Insolvency and Bankruptcy Code, 2016.
- It is a key pillar for the implementation of Code which consolidates and amends the laws for reorganization and insolvency resolution in India.
- This incorporates corporate persons, partnership firms and individuals in a time-bound manner for maximization of value of assets, credit availability, etc.
- It regulates the Insolvency Professionals, Insolvency Professional Agencies, Insolvency Professional Entities and Information Utilities.
- IBBI is designated as the ‘Authority’ under the Companies (Registered Valuers and Valuation Rules), 2017 for regulation and development of the profession of valuers in the country.
Ref: Source
| UPSC IAS Preparation Resources | |
| Current Affairs Analysis | Topperspedia |
| GS Shots | Simply Explained |
| Daily Flash Cards | Daily Quiz |