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INSOLVENCY AND BANKRUPTCY BOARD OF INDIA (MODEL BYE- LAWS
AND GOVERNING BOARD OF INSOLVENCY PROFESSIONAL AGENCIES)
REGULATIONS, 20161
[Amended upto 27-04-2021]
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 -
CHAPTER I
PRELIMINARY
Short title and commencement.
1. (1) These Regulations may be called the Insolvency and Bankruptcy Board of India
(Model Bye-Laws and Governing Board of Insolvency Professional Agencies)
Regulations, 2016.
(2)These Regulations shall come into force on the date of their publication in the
Official Gazette.
Definitions.
2. (1) In these Regulations, unless the context otherwise requires-
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.
1Vide Notification No. IBBI/2016-17/GN/REG001, dated 21st November, 2016, published in Gazette of India,
Extraordinary, Part III, Sec.4, vide No. 421, dated 22nd November, 2016 (w.e.f. 22.11.2016).
2 Inserted by Notification No. IBBI/2018-19/GN/REG35, dated 11th October, 2018 (w.e.f. 11-10-2018).
3 Renumbered by Notification No. IBBI/2018-19/GN/REG35, dated 11th October, 2018 (w.e.f. 11-10-2018).
Before renumbered, it stood as under:
“(a) “Code” means the Insolvency and Bankruptcy Code, 2016 (31 of 2016).”
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(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.
CHAPTER II
BYE LAWS
Insolvency professional agencies to have Bye-Laws.
3. (1) A company shall submit to the Board its bye-laws along with the application for
its registration as an insolvency professional agency.
(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.
4. (1) The Governing Board may amend the bye-laws by a resolution passed by votes in
favour being not less than three times the number of the votes, if any, cast against the
resolution, by the directors.
(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.
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CHAPTERIII
GOVERNING BOARD
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:
4Substituted by Notification No. IBBI/2018-19/GN/REG35, dated 11th October, 2018 (w.e.f. 11-10-2018). Regulation 5,
before substitution stood as under:
“5.(1) The Governing Board shall have a minimum of seven directors.
(2) 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.
(3) Not more than one fourth of the directors shall be insolvency professionals.
(4) More than half of the directors shall be independent directors at the time of their appointment, and at all times
during their tenure as directors:
Provided that no meeting of the Governing Board shall be held without the presence of at least one independent
director.
(5) An independent director shall be an individual-
(a)
who is a person of ability and integrity;
(b)
who has expertise in the field of finance, law, 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 percent of its share capital, during the two immediately
preceding 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 a governing council of any of the shareholders holding more than ten percent of the
share capital of the insolvency professional agency; and
(6) The directors shall elect an independent director as the Chairperson of the Governing Board.
Explanation - For the purposes of this Regulation, any fraction contained in
‘more than half’ shall be rounded off to the next higher number; and
(a)
‘not more than one- fourth’ shall be rounded down to the next lower number.”
5Inserted by Notification No. IBBI/2020-2021/GN/REG068 dated 14th January, 2021 (w.e.f. 14-01-2021).
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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.
