2.3.12:Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.

12. Recognition of Insolvency Professional Entities.

(1)Substituted vide  the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2018 dated 27.03.2018 effective from 01.04.2018. To view the notification,Click Here A company, a registered partnership firm or a limited liability partnership may be recognised as an insolvency professional entity,IBBI has de-recognised 13 of the Insolvency Professional Entities who have failed to comply with the provisions of Regulation 12(1) of this Regulations vide its Order dated 17.01.2019. To view the Order, Click Here.

IBBI refrains Insolvency Professional Entities from seeking empanelment with or joining any panel of any market participant vide Circular No. IBBI/IPE/014/2018 dated 6.07.2018. To view the Circular, Click Here if –

(a) its objective is to provide support services to insolvency professionals or to carry on the activities of an insolvency professional or both;Substituted vide Notification dated 28.09.2022 regarding Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Fourth Amendment) Regulations, 2022. To view the Notification, Click Here.

(a) its sole objective is to provide support services to insolvency professionals;Substituted vide IBBI (Insolvency Professionals) (Second Amendment) Regulations, 2020 dated 30.06.2020. To view the notification, Click Here

(a)This provision is to be complied on or before 30.09.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here its sole objective is to provide support services to insolvency professionals, who are its partners or directors, as the case may be;

(b)This provision is to be complied on or before 30.09.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here it has a net worth of not less than one crore rupees;

(c)Substituted vide Notification dated 28.09.2022 regarding Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Fourth Amendment) Regulations, 2022. To view the Notification, Click Here. majority of its equity shares and voting rights are held by insolvency professionals, who are its directors, in case it is a company;

(c)This provision is to be complied on or before 30.09.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here majority of  its equity sharesSubstituted vide Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021 dated 22.07.2021. To view the notification, Click Here its shares is held by insolvency professionals, who are its directors, in case it is a company;

(d)This provision is to be complied on or before 30.09.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here  majority of capital contribution is made by insolvency professionals, who are its partners, in case it is a limited liability partnership firm or a registered partnership firm;

(e)This provision is to be complied on or before 30.06.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here majority of its partners or directors, as the case may be, are insolvency professionals;

(f)This provision is to be complied on or before 30.06.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here  majority of its whole time directors are insolvency professionals, in case it is a company; and

(g)This provision is to be complied on or before 30.06.2018 vide the Circular No. IPE/008/2018 dated 05.04.2018. To view the Circular, Click Here none of its partners or directors is a partner or a director of another insolvency professional entity:

Provided thatInserted vide Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021 dated 22.07.2021. To view the notification, Click Here  the insolvency professional entities recognised before the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021 shall comply with the provisions of clauses (b) and (c) on or before 31stDecember 2021.

Explanation.-For the purposes of clause (b) of this sub-regulation, ‘net worth’ means-

(i) the net worth as defined under section 2(57) of the Companies Act, 2013 in case of a company;

(ii) sum of partners‟ contribution in the capital account and their undistributed profits net of accumulated losses, if any, in case of a registered partnership firm or limited liability partnership.

Provided that the insolvency professional entities recognised as on the date of commencement of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Amendment) Regulations, 2018 shall comply with the provisions of clauses (a), (b) (c) and (d) on or before 30th September, 2018 and the provisions of clauses (e), (f) and (g) on or before 30th June, 2018.

12. (1) A limited liability partnership, a registered partnership firm or a company may be recognised as an insolvency professional entity if-

(a) a majority of the partners of the limited liability partnership or registered partnership firm are registered as insolvency professionals; or

(b) a majority of the whole-time directors of the company are registered as insolvency professionals, as the case may be.

(2)Substituted vide the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2018 dated 11.10.2018. To view the Notification, Click Here A person eligible under sub-regulation (1) may make an application for recognition as an insolvency professional entity to the Board in  Form CRefer Second Schedule of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. Form C substituted vide Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2019 dated 25.10.201 To view the schedule,Click Here of the Second Schedule along with an application fee of two lakhSubstituted vide the Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Third Amendment) Regulations, 2022 dated 20.09.2022. To view the Notification, Click Here fifty thousand rupees.

(2) A person eligible under sub-regulation (1) may make an application for recognition as an insolvency professional entity to the Board in Form CRefer Second Schedule of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.To view the schedule,Click Here of the Second Schedule to these Regulations.

(3)Inserted vide Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021 dated 22.07.2021. To view the notification, Click Here The Board shall acknowledge an application made under this regulation within seven days of its receipt.

(4)Inserted vide Insolvency and Bankruptcy Board of India (Insolvency Professionals) (Second Amendment) Regulations, 2021 dated 22.07.2021. To view the notification, Click Here The Board may, after examination of the application,-

(i) require the applicant to submit, within reasonable time, additional documents, information or clarification;

(ii)inspect or inquire the applicant;

(iii) require any of the directors or partners of the applicant to appear, within a reasonable time, before it in person for any clarifications, as may be necessary for the purpose of considering the application