IBBI regulation IBBI/2016-17/GN/REG001 · 29 Jan 2025
Official title
IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 (Amended upto 29.01.2025)
Official record
Open source pageSummary
These regulations establish the framework for model bye-laws and the governance structure of Insolvency Professional Agencies (IPAs). IPAs must adopt bye-laws consistent with the model, covering membership, monitoring, grievance redressal, and disciplinary proceedings. The regulations mandate specific Governing Board compositions, including independent directors and a managing director, and set eligibility criteria for professional members. IPAs are required to maintain member registers, issue authorizations for assignments, and enforce a code of conduct. The regulations detail disciplinary powers, including monetary penalties for specific contraventions, and establish procedures for membership surrender and expulsion. IPAs must designate a compliance officer to report non-compliance to the Board and publish their bye-laws, committee compositions, and policies on their website.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (MODEL BYE- LAWS AND GOVERNING BOARD OF INSOLVENCY PROFESSIONAL AGENCIES) REGULATIONS, 2016¹
[Amended upto 29-01-2025]
IBBI/2016-17/GN/REG001.- In exercise of the powers conferred by sections 196, 203 and 205 read with section 240 of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), the Insolvency and Bankruptcy Board of India hereby makes the following Regulations, namely -
Short title and commencement.
(2) These Regulations shall come into force on the date of their publication in the Official Gazette.
Definitions.
²[(a) “Board” means the Insolvency and Bankruptcy Board of India established under section 188 of the Code;]
³[(aa) “Code” means the Insolvency and Bankruptcy Code, 2016 (31 of 2016);]
(b) “Governing Board” means the Board of Directors, as defined under section 2(10) of Companies Act, 2013 (18 of 2013), of the company registered as an insolvency professional agency;
(c) “model bye-laws” means the model bye-laws as contained in the Schedule to these Regulations.
(2) Unless the context otherwise requires, words and expressions used and not defined in these Regulations shall have the meanings assigned to them in the Code.
Insolvency professional agencies to have Bye-Laws.
(2) The bye-laws shall provide for all matters specified in the model bye-laws.
(3) The bye-laws shall at all times be consistent with the model bye-laws.
(4) The insolvency professional agency shall publish its bye-laws, the composition of all committees formed, and all policies created under the bye-laws on its website.
Amendment of Bye-Laws.
(2) A resolution passed in accordance with sub-regulation(1) shall be filed with the Board within seven days from the date of its passing, for its approval.
(3) The amendments to the bye-laws shall come into effect on the seventh day of the receipt of the approval, unless otherwise specified by the Board.
(4) The insolvency professional agency shall file a printed copy of the amended bye-laws with the Board within fifteen days from the date when such amendment is made effective.
Composition of the Governing Board.
⁴[5. Composition of the Governing Board.- (1) The Governing Board shall consist of- (a) managing director; (b) independent directors; and (c) shareholder directors:
Provided that the Governing Board shall have minimum seven directors.
(2) The managing director shall not be considered either an independent director or a shareholder director.
(3) Any employee of an insolvency professional agency may be appointed as a director on its Governing Board in addition to the managing director, but such director shall be deemed to be a shareholder director.
(4) More than half of the directors shall be persons resident in India at the time of their appointment, and at all times during their tenure as directors.
⁵[(4A) A shareholder director shall be an individual, who satisfies the eligibility norms, including experience and qualification, as decided by the Governing Board.]
(5) The number of independent directors shall not be less than the number of shareholder directors: Provided that no meeting of the Governing Board shall be held without the presence of at least one independent director.
(6) An independent director shall be an individual- (a) who is a person of ability and integrity; ⁶[(b) who has expertise in the field of finance, law, economics, accountancy, valuation, management or insolvency;] (c) who is not an insolvency professional; (d) who is not a relative of the directors of the Governing Board; (e) who had or has no pecuniary relationship with the insolvency professional agency, or any of its directors, or any of its shareholders holding more than ten per cent. of its share capital, during the immediately preceding two financial years or during the current financial year; (f) who is not a shareholder of the insolvency professional agency; (g) who is not a member of the Board of Directors of any of the shareholders holding more than ten percent. of the share capital of the insolvency professional agency.
(7) An independent director shall be nominated by the Board from amongst the list of names proposed by the insolvency professional agency.
(8) An individual may serve as an independent director for a maximum of two terms of three years each or part thereof, or up to the age of ⁷[seventy-five years], whichever is earlier.
(9) The second term referred to in sub-regulation (8) may be subject to a satisfactory performance review of the first term by the Governing Board.
(10) A cooling off period of three years shall be applicable for an independent director to become a shareholder director in the same or another insolvency professional agency.
(11) Not more than one fourth of the directors shall be insolvency professionals.
(12) The directors shall elect an independent director as the Chairperson of the Governing Board.
(13) A director, who has, any interest, direct or indirect, pecuniary or otherwise, in any matter coming up for consideration at a meeting of the Governing Board or any of its Committees, shall as soon as possible after relevant circumstances have come to his knowledge, disclose the nature of his interest at such meeting and such disclosure shall be recorded in the proceedings of the Governing Board or the Committee, as the case may be, and the director shall not take part in any deliberation or decision of the Governing Board or the Committee with respect to that matter.
⁸[(14) A director shall disclose any order of any authority that affects his character or reputation, to the insolvency professional agency, within one week of issue of such order: Provided that a copy of the order shall be placed forthwith on the website of the insolvency professional agency; Provided further that such director shall forthwith cease to be a director of the insolvency professional agency where the order disqualifies him to be a director of a company.]
5A. Managing director.-
(1) An insolvency professional agency shall, subject to the guidelines issued by the Board from time to time, determine the qualification and experience, manner of appointment, terms and conditions of appointment and other procedural formalities associated with the selection and appointment of the managing director, subject to the condition that- (a) an individual shall be selected as managing director through an open advertisement in all editions of at least one national daily newspaper; (b) an individual at the time joining as managing director shall not be above the age of fifty-five years, which may be relaxed by the Governing Board up to sixty years, after recording reasons therefor; and (c) an individual shall not serve as managing director after he attains the age of sixty-five years.
(2) The appointment of an individual as the managing director shall be for a tenure of not less than three years but not exceeding five years.
