Insolvency and Bankruptcy Board notifies two regulations

The Dollar Business Bureau 

The Insolvency and Bankruptcy Board of India (IBBI) on Wednesday notified two regulations; one of them will allow not-for-profit companies having a minimum net worth of Rs 10 crore to act as an insolvency professional agency under the Insolvency and Bankruptcy Code.

The IBBI has notified two sets of regulation. These regulations will come into effect from November 29, 2016. 

Under the Insolvency and Bankruptcy law, advocates, chartered accountants, company secretaries and cost accountants with 10 years’ of post-membership experience (practice or employment) or a Graduate with 15 years’ of post-qualification managerial experience, on passing the limited insolvency examination, or any other individual on passing the national insolvency examination will be eligible for registration as an insolvency professional. Such registration will be valid for a limited period of six months.

"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," Corporate Affairs Ministry said in a release today.

"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," it said in the release.

Such entities will also have membership, monitoring, grievance redressal and disciplinary committees to regulate and will have an oversight of the professional members.

In May, the government notified the code, which envisages to consolidate and amend laws pertaining to reorganisation as well as insolvency resolution of corporate, partnership firms and individuals in a time-bound manner.