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Insolvency Profession & Insolvency Professional Course

Insolvency Profession & Insolvency Professional Course

This article is all about Insolvency Profession in India. You will come to know what is insolvency profession, how you can become an Insolvency Professional in India, what is eligibility, fees structure, and process to enroll.

What is Insolvency Profession?

Insolvency Profession gets its recognition with the implementation of the Insolvency and Bankruptcy Code, 2016 (Code). As per the Code, from the date of appointment of Insolvency Profession, Management of affairs of concern shall vest in hands of Insolvency Professional, powers of the Board of Directors shall stand suspended, all officers & managers of concern shall report to Insolvency Professional only. Such professionals shall act, take actions, shall have authority to access records, will be responsible for compliance of any law.

Section 206 of the Insolvency and Bankruptcy Code, 2016 (Code) provides as follows:

“A person will enroll as a member of an insolvency professional agency and registered with the Board to render his services as an insolvency professional under this Code.”

How to Become an Insolvency Professional in India?

How to Become an Insolvency Professional in India?

Let's move step by step

Who authenticates the Insolvency Professional in India?

The Institute of Chartered Accountants of India formed a Company under section 8 of Companies Act, 2013 as Indian Institute of Insolvency professionals of ICAI (IIIPI) to enroll and regulate insolvency professionals as its members in accordance with the Insolvency and Bankruptcy code 2016 and read with regulations.

Eligibility

Eligibility to Register as an Insolvency Professional (IP) with IBBI /Enrol Professional Member with IIIPI:

I. Regulation 4 of the IBBI (Insolvency Professionals) Regulations, 2016 specifies the eligibility criteria to register as an IP. According to this Regulation, an individual shall not be eligible to register as an insolvency professional:

(a) If he is a minor.
(b) If he is not a person resident in India.
(c) If he does not have the qualification and experience specified in Regulation
(d) If any competent court convicts him for an offence punishable with imprisonment for a term exceeding six months or for an offence involving moral turpitude, and a period of five years has not elapsed from the date of expiry of the sentence. if court gives sentence in respect thereof to imprisonment for a period of seven years or more, he shall not be eligible to register.
(e) If he is an undischarged insolvent or has applied as an insolvent.
(f) If he is of unsound mind.
(g) If he is not a fit and proper person. IBBI may take account of any consideration as it deems fit, including but not limited to the following criteria-
(i) integrity, reputation, and character,
(ii) absence of convictions and restraint orders, and
(iii) competence, including financial solvency and net worth.

II. Clause 9 of the By-Laws of IIIPI states that an individual shall not be enrolled as a professional member with IIIPI if he is not eligible to register as an Insolvency Professional with the Board.

Qualifications and Experience to Register as an Insolvency Professional

Step I. A person should have the following qualifications to register as an Insolvency Professional.
  • Chartered Accountant, Company Secretary, Cost Accountant, and Advocate who has enrolled as a member of the respective Institute/Bar Council and has ten years of experience [Regulation 5(c)(iv) of the IBBI (Insolvency Professionals) Regulations,2016].
  • A Graduate who has fifteen years of experience in management, after receiving a Bachelor’s degree from a university established or recognized by law. [Regulation 5(c)(iii) of the IBBI (Insolvency Professionals) Regulations, 2016].
  • Successfully completed the National Insolvency Programme, as may be approved by the IBBI [Regulation 5(c)(i) of the IBBI (Insolvency Professionals) Regulations, 2016]. IBBI has yet to notify this program.
  • Successfully completed the Graduate Insolvency Programme GIP, as may approve by the IBBI [Regulation 5(c)(ii) of the IBBI (Insolvency Professionals) Regulations, 2016].
Step II. The person who has one of the above qualifications must pass the Limited Insolvency Examination conducted by IBBI.

Step III. He is required to apply for enrolment as a professional member with an Insolvency Professional Agency (IPA) within twelve months before the date of his passing the Limited Insolvency Examination [Regulation 5(a) of the IBBI (Insolvency Professionals) Regulations, 2016].

Step IV. After his enrolment as a professional member, he is required to complete the mandatory 50 hours Pre-Registration Educational Course from an IPA. [Regulation 5(b) of the IBBI (Insolvency Professionals) Regulations, 2016].

Step V. He will be eligible to apply for Registration as an Insolvency Professional.

Procedure for Enrolment as a Professional Member

(a) IIIPI shall examine the application in accordance with the applicable provisions of the Code, and rules, regulations, and guidelines thereunder.
(b) Regulation 7(2)(h) of the IBBI (Insolvency Professionals) Regulations, 2016 requires an Insolvency Professional to abide by the Code of Conduct at all times.
(c) Clause 23 of the Code of Conduct reads as follows:

“An insolvency professional must not engage in any employment

  • when he holds a valid Authorisation for Assignment 
  • when he is undertaking an assignment.”


This would enable an individual to seek registration as an insolvency professional even when he is in employment. 
(d) IIIPI will verify the followings:
  • Whether any disciplinary proceedings are pending
  • Whether a regulator ICAI, ICAI (Cost), ICSI, Bar Council has initiated any criminal proceeding against the professional member and is pending for disposal?
  • Whether the name of the professional member appears in the databases of the Ministry of Corporate Affairs regarding: 
    • i. Directors disqualified under section 164 of the Companies Act, 2013, or 
    • ii. Proclaimed Offenders under Section 82 of the Code of Criminal Procedure, 1973.
  • Whether the name of a professional member appears in the list of defaulters of RBI/Credit Information Company. For Credit Information, the applicant has to provide his CIBIL report after obtaining the same from a registered Credit Information Company.
(e) After examination of the application, IIIPI shall give an opportunity to the applicant to remove the deficiencies, if any, in the application.
(f) IIIPI may require an applicant to submit additional documents, information, or clarification that it deems fit, within a reasonable time.
(g) IIIPI may reject an application if the applicant does not satisfy the criteria for enrolment or does not remove the deficiencies or submit additional documents or information to its satisfaction, for reasons recorded in writing.
(h) The IIIPI shall communicate the rejection of the application to the applicant stating the reasons for such rejection, within thirty days of the receipt of the application, excluding the time given for removing the deficiencies or presenting additional documents or clarification, as the case may be.
(i) Communicate the primary acceptance of the application to the applicant, along with the enrolment number
(j) IIIPI will issue a Certificate of Membership to the enrolled member.

An appeal against the order of Application for Enrolment

(a) An applicant aggrieved of a decision rejecting his application may appeal to the Membership Committee of the Agency within thirty days from the receipt of such decision.
(b) The Membership Committee shall pass an order disposing of the appeal in the manner it deems expedient, within thirty days of the receipt of the appeal.

Insolvency Professional Examination

Insolvency Professional Examination

Limited Insolvency Examination

IBBI is notifying the syllabus for the Limited Insolvency Examination from time to time.
The syllabus, format, qualifying marks, and frequency of the Limited Insolvency Examination shall be available on the website of the Board at least three months before the examination. [Regulation 3(3) of the IBBI (Insolvency Professionals)Regulations, 2016]

I.    Syllabus for Examination

The syllabus for the Examination is as under:



This syllabus will be valid for Limited Insolvency Examination w.e.f. from 1st July 2019.

Note: Note: Any amendment in law, an Act of Parliament, or any Rule in the syllabus shall be in force as on 30th June 2019.

II.   Format of Examination

The format of Examination is as under:
  • The Examination will be online (in a computer-based environment) with objective multiple-choice questions.
  • The duration of the Examination will be two hours.
  • A candidate will answer 89 questions in two hours for a total of 100 marks.
  • There will be a negative marking of 25% of the marks assigned for the question.
  • The passing mark for the Examination is 60%.
  • The Board will award a certificate to Passing candidates 
  • A candidate will get a temporary mark sheet on submission of the Examination paper
  • No workbook or study material will be provided.

III.   Frequency of Examination

The frequency of Examination is as under:
  • The Examination centers are available at various locations across the country.
  • A candidate needs to enroll and register at the IBBI website i.e. www.ibbi.gov.in for Examination by choosing the time, the day, and the Examination center for his Examination.
  • A candidate needs to pay the Examination fee of Rs.1500/- (One thousand five hundred rupees only) online on every enrolment.

Limited Insolvency Examination  Frequently Asked Questions
Limited Insolvency Examination  Frequently Asked Questions


Register & Enroll Online
Register & Enroll Online


Sample Questions
Sample Questions


National Insolvency Programme

IBBI is yet to notify this Programme.

Graduate Insolvency Programme

The GIP is the first of its kind program for those aspiring to take up the discipline of insolvency professional as a career or seeking to take up other roles in the value chain, in India, and in foreign jurisdictions. A student who completes the GIP will be eligible for registration as an insolvency professional under the Insolvency and Bankruptcy Code 2016, without having to wait to acquire the 10-year experience as required by the Code at present. For details please click on    https://iica.nic.in/gip/about-us.aspx#cisb_abt.

Fees Structure for Insolvency Professional

Fees Structure for Insolvency Professional

(1) Enrolment Fees

a) Onetime non-refundable Enrolment Fee of Rs. 2000/- (Rupees Two Thousand only) plus GST @ 18% along with the Enrolment Form.

(2) Annual Membership Fees of IIIPI

a) Annual Membership Fee Rs. 10,000/- (Rupees Ten Thousand only) plus GST @ 18% and is due w.e.f. 01, April of each year.
b) Membership Fee is 50% of the Annual Membership Fee i.e. an amount of Rs. 5000/- (Rupees Five Thousand only) w.e.f. 1st October of each Financial Year.
c) Members enrolled with IIIPI must pay an Annual membership fee Rs. 10,000/- (Rupees Ten Thousand only) plus applicable taxes @ 18% for each Financial Year. The IIIPI shall receive fees before 30th April of every year without incurring any penalty
d) Members may pay the Annual Membership Fees on or before 30th June of the year with a late fine of Rs. 500/- (Rupees Five Hundred only).
e) Members delaying Annual Membership Fees payment beyond 30th June will be eligible for referring to the Membership Committee for necessary action as per Bye-Laws.
f)  A member can apply for the surrender of his membership before 30th April, if he has not paid his Annual Membership Fees for the current year.

ENROLLMENT PROCEDURE

ENROLLMENT PROCEDURE

Step 1: Apply Online / Offline

Apply for Online Enrolment: Click Here
Or
Download the Enrolment Form (If Apply for Offline):
Word Format | PDF Format

Step 2. Make a Payment of Non-Refundable Fees.


You can make payment through either of the following modes:


  • Demand Draft – in the name of “Indian Institute of Insolvency Professionals of ICAI” payable at “New Delhi”. 
  • By Online Payment – The payment of the amount, as applicable, can be made online by clicking here. 

Step 3. Address to send the Hard-Copy of Enrollment Form 

Only in case not able to fill Online form at following Address:

Indian Institute of Insolvency Professionals of ICAI8th Floor, Hostel Block,A- 29, Sector- 62,Noida – 201309,Contact: +91 120 3045960 / 8178995143

Note:- Enrollment Form shall be accompanied by relevant self - attested documents.

Step 4. After enrollment, undergo a 50 hours Pre-Registration Education Course


FeesGST @ 18%Total Fees
28,0005,04033,040/-

Step 5. Register with IBBI

File an online application in Form A on the website of Insolvency and Bankruptcy Board of India for Registration as an Insolvency Professional. Please Click Here


Conclusion:

As you are now aware of the whole process to become an Insolvency Professional in India, I personally wish you a great future ahead.

I tried my best to cover each and everything you should know about Insolvency Profession in India, if you still have any queries or doubts, you can post them right under this post, I will answer them at my earliest. 

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