IBBI refrain Insolvency Professional Entities from seeking empanelment for any market participant - Taxsure Consultancy Services

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Wednesday, July 11, 2018

IBBI refrain Insolvency Professional Entities from seeking empanelment for any market participant

After observing that few market participants are seeking empanelment of Insolvency Professional Entities (‘IPEs’) and a few IPEs are seeking empanelment with market participants. Hence, IBBI directs not to seek empanelment with or joining any panel of any market participant.
IBBI highlights Reg. 12 (1) of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 which states that only if “its sole objective is to provide support services to the insolvency professionals, who are its partners or directors, as the case may be”. Hence, the clause directs IPE can only provide services only to the insolvency professionals who are its partners or directors and cannot provide any service to any other person.
In addition, also refers to Section 206 of the Insolvency and Bankruptcy Code, 2016 (Code) which prohibits a person from rendering services as an insolvency professional (IP) unless he is:
(a) enrolled as a member of an Insolvency Professional Agency (IPA), and
(b) registered with the Insolvency and Bankruptcy Board of India (IBBI).
Thus, IP who are registered with IBBI can only render services as an IP otherwise no other person can provide the respective services. In addition, states that IPE can neither enrolled as a member of an IPA nor registered as an IP with the IBBI.

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