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Insolvency Professional- 5 Answers to Know !

Insolvency Professional

Insolvency Professional- 5 Answers to Know !

“Every professional after obtaining the membership MUST register himself with the Board within a specified time in a particular manner and on payment of the fee in the manner specified”
Isha Malik (Company Secretary, MUDS Management Pvt Ltd)

How to apply for a Certificate of Registration?

  1. An individual shall make an application in Form A of the Second Schedule along with a non-refundable fee of 10000.
  2. The board shall acknowledge the same within 7 days of the receipt.
  3. Board may ask for additional information or clarification in a prescribed manner.

Board may also ask an applicant to appear before it in person or through his authorized representative if any clarification is required.

“ After satisfaction of the Board, it may grant a certificate to the applicant in Form B of the Second Schedule to these Regulations within 60 days of receipt of application”                                                    Divya Gupta (Market Analyst, MUDS Management Pvt Ltd)

How to get a Temporary Registration?

Following 3 points should be considered while considering for temporary registration for the initial period of 6-months from 01-01-2017

Point #1: Notwithstanding any of the provisions of Regulation 5, an individual shall be eligible if:

  • Has continuous practice for 15 years
  • Has submitted an application for registration in Form A of the second schedule on or before 31/12/2016 with a non-refundable application fee of 5000.

Point #2: Agency shall submit the fee and the details of the applications received to the Board under sub-regulation(1 (b).
Point #3: Any professional registered shall not undertake any assignment after the expiry of the registration

Recognition of Insolvency Professional Entities

  1. An LLP, a registered partnership firm or a company can only be recognized as Insolvency Professional Entity if:
    Majority of them are registered as Insolvency Professionals; or
    Majority of the whole-time Directors are registered as Insolvency Professionals
  2. A person who is eligible under sub-regulation (1) can make an application to get recognized to the Board in Form C of the Second Schedule to these Regulations

“Post necessary enquiry, if the Board is satisfied about the eligibility of applicant, it may grant a certificate of Recognition in Form D of the Second Schedule of these Regulations”
Divya Gupta (Market Analyst, MUDS Management Pvt Ltd)

Code of Conduct for Insolvency Professional

  • Code of Conduct #1: Must maintain integrity by being honest, straightforward and forthright in all professional relationships.
  • Code of Conduct #2: Must maintain complete independence in his professional relationships and should conduct the insolvency resolution liquidation process, as the case may be, independent of external influences.
  • Code of Conduct #3: Must maintain and upgrade his professional knowledge and skills to render competent professional service.
  • Code of Conduct #4: Must inform such persons under the Code as may be required, of a misapprehension or wrongful consideration of a fact of which he becomes aware, as soon as may be applicable.
  • Code of Conduct #5: Must adhere to the time limits prescribed in the Code and the rules, regulations, and guidelines thereunder for insolvency regulation, liquidation or bankruptcy process.
  • Code of Conduct #6: Must make efforts to ensure that all communication to the stakeholders is made well in advance and in a manner that is simple, clear, and easily understood by the recipients
  • Code of Conduct #7: Must ensure the confidentiality of the information relating to the insolvency resolution process, liquidation or bankruptcy process
  • Code of Conduct #8: Must refrain from taking too many assignments
  • Code of Conduct #9: Must provide services for remuneration, which is charged in a transparent manner
  • Code of Conduct #10: Must not accept gifts or hospitality which undermines or affects his independence as an insolvency professional

“If the Board, on receipt of complaint under section 217 or has proof that any of the provisions of the Code has been contravened issued thereunder can direct authority to carry out investigation within such time and manner as specified by regulations.”
Isha Malik (Company Secretary, MUDS Management Pvt Ltd)

Procedure for Inspection, Investigation, and Disciplinary Action

  • Step #1: The authority shall serve notice at least 10 days before the commencement of the inspection.
  • Step #2: The authority may ask to submit records or proofs before commencement.
  • Step #3: If required, the authority may visit the office of the accused.
  • Step #4: The accused need to provide access to all the occupied premises

“The authority may submit an interim inspection report if required and copy of draft inspection report to the accused requiring comments within 15 days from receipt of the draft inspection report.”
Divya Gupta (Market Analyst, MUDS Management Pvt Ltd)

“Insolvency Professionals are now under scanner”
Shweta Gupta(Founder and CEO, MUDS Management Pvt Ltd)

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