Insolvency Professionals (IPs) are the central human infrastructure of the IBC insolvency ecosystem. They serve as Interim Resolution Professional (IRP), Resolution Professional (RP), Liquidator, or Bankruptcy Trustee in various IBC proceedings. Their registration, conduct, and fees are regulated by IBBI (Insolvency and Bankruptcy Board of India).
Regulatory Framework
- IBBI (Insolvency Professionals) Regulations 2016
- IBBI (Insolvency Professional Agencies) Regulations 2016
- IBBI Code of Conduct for Insolvency Professionals (Schedule I to IP Regulations)
- IBBI (Insolvency Professional Entities) Regulations 2017 (for firms/companies)
Eligibility Requirements
An individual must satisfy all of the following:
- Educational qualification: CA/CS/CWA with 10+ years OR Advocate with 10+ years OR Management graduate with 15+ years in finance/law/management
- Examination: Pass the IBBI Limited Insolvency Examination (computer-based, 150 questions, 120 minutes, 60% pass mark)
- IPA Membership: Must become a member of one of the 3 IBBI-registered IPAs
- Fit and Proper: Not insolvent, no criminal conviction, no disciplinary action pending in professional body
IP Registration Process
- Pass IBBI Limited Insolvency Examination
- Apply for membership to an IPA (ICAI/ICSI/ICMAI Insolvency Professional Agency wing)
- IPA admits as member and forwards details to IBBI
- IBBI registers the IP and issues IBBI registration certificate
- IP must undergo Continuing Professional Education (CPE): 20 hours per year
IP Roles in IBC Proceedings
| Role | Context | Key Duties |
|---|---|---|
| IRP (Interim RP) | Appointed by NCLT on admission of CIRP | Take over management, form CoC, public announcement |
| RP (Resolution Professional) | Appointed by CoC (replacing IRP) | Conduct CIRP, prepare Information Memorandum, invite resolution plans |
| Liquidator | CIRP fails or voluntarily appointed | Sell assets, distribute proceeds per Section 53 waterfall |
| Bankruptcy Trustee | Personal insolvency (individuals) | Manage personal debtor estate, implement repayment plan/bankruptcy |
Code of Conduct (Schedule I to IP Regulations)
IPs must follow the 12-principle Code of Conduct:
- Independence and impartiality
- Fair and transparent conduct
- No unauthorized disclosure of information
- Disclose all conflicts of interest promptly
- Maintain proper books and records
- Not accept cases beyond capacity
- Report fraud to IBBI and Adjudicating Authority
IP Fee Regulation
- IP fees are paid as part of insolvency process costs (highest priority in Section 53 waterfall)
- IBBI prescribes indicative fee ranges based on turnover of corporate debtor
- For large cases: CoC may negotiate; NCLT can cap fees if unreasonable
- Minimum fee per case: Rs.1 lakh (for CIRP of small companies)
- Fee disputes: NCLT can adjudicate
IBBI Disciplinary Action
IBBI can take disciplinary action against IPs for misconduct:
- Warning
- Suspension of registration (temporary)
- Cancellation of registration (permanent bar)
- Penalty up to Rs.1 crore per proceeding
- IBBI passes Show Cause Notice → IP responds → Disciplinary Committee order → Appeal to NCLAT
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