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Corporate Restructuring, Valuation and Insolvency · Insolvency

Section 208 IBC: Functions and Obligations of Insolvency Professionals

Updated 11 October 2026 · Fact-checked

Section 208 of the IBC lists the processes in which an insolvency professional must act (fresh start, IRP, CIRP, pre-pack, bankruptcy and liquidation) and sets a five-point code of conduct. In exams, name the process, state the function, then apply the conduct duties to the facts given.

Understand Functions and Obligations of Insolvency Professionals

An insolvency professional (IP) is the person who actually runs an insolvency or bankruptcy process under the Code. The Adjudicating Authority decides, the creditors vote, but the IP does the work in between. Section 208 tells you what the IP does and how the IP must behave.

Section 208(1) says that where an insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, the IP must take the actions necessary in these matters: (a) fresh start order process under Chapter II of Part III; (b) individual insolvency resolution process under Chapter III of Part III; (c) corporate insolvency resolution process under Chapter II of Part II; (ca) pre-packaged insolvency resolution process under Chapter III-A of Part II; (d) individual bankruptcy process under Chapter IV of Part III; and (e) liquidation of a corporate debtor firm under Chapter III of Part II.

Section 208(1A) covers the stage before a pre-pack starts. Where the name of the IP proposed to be appointed as resolution professional is approved under section 54A(2)(e), that IP must take the actions necessary to perform his functions and duties before the pre-packaged insolvency resolution process is initiated.

Section 208(2) is the code of conduct. Every IP must: (a) take reasonable care and diligence while performing duties; (b) comply with all requirements and terms and conditions in the bye-laws of the insolvency professional agency (IPA) of which he is a member; (c) allow the IPA to inspect his records; (d) submit a copy of the records of every proceeding before the Adjudicating Authority to the Board as well as to his IPA; and (e) perform his functions in such manner and subject to such conditions as may be specified.

The same code is carried into specific roles. Sections 93 and 120 require the resolution professional to follow the section 208 code of conduct in the individual processes, and section 143 requires the same of the bankruptcy trustee. For a pre-pack, section 54F sets the detailed duties and powers of the resolution professional, for example confirming the list of claims, constituting the committee of creditors and preparing the information memorandum.

Key rules to remember

Processes covered by section 208(1)
Fresh start + IRP (individual) + CIRP + pre-pack + individual bankruptcy + liquidation of corporate debtor firm
Clauses (a), (b), (c), (ca), (d), (e). Know the Part and Chapter for each.
Pre-pack stage before initiation
Section 208(1A): IP approved under section 54A(2)(e) acts before the pre-pack process begins
Applies to the IP proposed to be appointed as resolution professional.
Code of conduct, section 208(2)
(a) reasonable care and diligence; (b) comply with IPA bye-laws; (c) allow IPA inspection of records; (d) submit copy of records of every proceeding before the Adjudicating Authority to the Board and the IPA; (e) perform functions as specified
Five limbs. Quote them in order.
Standard of conduct in other roles
Sections 93 and 120 (resolution professional) and section 143 (bankruptcy trustee): perform functions in compliance with the section 208 code
Shows section 208 is the common base.
Pre-pack RP duties and powers
Section 54F(2) duties; section 54F(3) powers
Duties include confirming claims and constituting the CoC. Powers include access to books and records.
Board's oversight functions
Section 196(1): register, inspect, investigate, monitor, call for information, redress grievances
Use to link the IP's duties to the IBBI's supervision.

How to solve Functions and Obligations of Insolvency Professionals questions

Exam questions give you a short fact pattern about an IP and ask what the Code requires or whether the IP erred. Use this order.

  1. 1Identify the process in the facts: fresh start, IRP, CIRP, pre-pack, bankruptcy or liquidation. Cite the matching clause of section 208(1).
  2. 2Note whether the facts fall before a pre-pack starts. If yes, bring in section 208(1A).
  3. 3List each act or omission of the IP in the facts.
  4. 4Match each act to a limb of the code of conduct in section 208(2), (a) to (e).
  5. 5If the role is resolution professional or bankruptcy trustee, add section 93, 120 or 143. For a pre-pack, add the relevant duty or power in section 54F.
  6. 6Link to the Board's or IPA's supervisory power where the facts involve inspection, records or complaints (section 196).
  7. 7Conclude clearly: complied or breached, and what the IP should do now.

Quickest way: Process, then five limbs

When to use it: When you have limited time on a short-note or case question on section 208.

  1. Write the process and clause number in one line.
  2. Write the five limbs of the code as a compact list.
  3. Underline the limb the facts touch and apply it in two sentences.
  4. Close with the consequence: IPA and Board oversight.

Common mistakes in Functions and Obligations of Insolvency Professionals

  • Listing only CIRP and liquidation as the processes under section 208(1).

    These are the most commonly studied processes.

    Fix: Remember all six: fresh start, individual insolvency resolution, CIRP, pre-pack, individual bankruptcy and liquidation of a corporate debtor firm.

  • Saying the IP submits records of every proceeding only to the IPA.

    Students link the IP mainly with the agency.

    Fix: Section 208(2)(d) requires a copy to the Board as well as to the IPA of which he is a member.

  • Treating the code of conduct as having more or fewer than five limbs, or mixing in rules from the IBBI regulations.

    The detailed Code of Conduct in the regulations is longer and gets blended in.

    Fix: For section 208 questions, give the five statutory limbs. Add regulations only as extra detail and label them as such.

  • Ignoring section 208(1A) for the pre-pack stage.

    It is a short sub-section inserted later.

    Fix: State that the IP approved under section 54A(2)(e) must act before the pre-pack process is initiated.

  • Quoting wrong section numbers for standard of conduct, such as using section 208 for the standard of conduct of the bankruptcy trustee.

    Sections 93, 120 and 143 have the same heading.

    Fix: Sections 93 and 120 deal with the resolution professional and section 143 with the bankruptcy trustee. All point back to section 208.

  • Giving general advice without applying to the facts.

    Students memorise the list and stop there.

    Fix: Quote the limb, state the fact that breaches or satisfies it, and give a conclusion.

Worked examples

Example 1

Ravi Menon, an insolvency professional, is conducting a CIRP of Sundaram Textiles Ltd. The IPA asks to inspect his records of the process. Ravi refuses, saying the records are confidential to the Adjudicating Authority. Advise whether he is right.

Show the solution
  1. Process: CIRP under Chapter II of Part II, covered by section 208(1)(c).
  2. Relevant rule: section 208(2)(c) requires every IP to allow the IPA of which he is a member to inspect his records.
  3. Application: the Code has no exception for records of proceedings before the Adjudicating Authority. Section 208(2)(d) in fact requires a copy of the records of every such proceeding to be given to the Board and the IPA.
  4. Link to supervision: the Board can inspect and call for information and records under section 196(1)(f) and (h).

Answer: Ravi is wrong. Section 208(2)(c) obliges him to allow the IPA to inspect his records, and refusal is a breach of the code of conduct.

Example 2

List the matters in which an insolvency professional must act under section 208(1) and state the code of conduct under section 208(2).

Show the solution
  1. Matters under section 208(1): (a) fresh start order process under Chapter II of Part III; (b) individual insolvency resolution process under Chapter III of Part III; (c) corporate insolvency resolution process under Chapter II of Part II; (ca) pre-packaged insolvency resolution process under Chapter III-A of Part II; (d) individual bankruptcy process under Chapter IV of Part III; (e) liquidation of a corporate debtor firm under Chapter III of Part II.
  2. Pre-pack stage: under section 208(1A), the IP whose name is approved under section 54A(2)(e) must act before the pre-pack process begins.
  3. Code of conduct under section 208(2): (a) reasonable care and diligence; (b) comply with IPA bye-laws; (c) allow the IPA to inspect records; (d) submit a copy of records of every proceeding before the Adjudicating Authority to the Board and the IPA; (e) perform functions in the manner and subject to the conditions specified.
  4. Extension: sections 93 and 120 require the resolution professional, and section 143 the bankruptcy trustee, to follow this code.

Answer: Section 208(1) covers six processes, from fresh start to liquidation of a corporate debtor firm, and section 208(2) sets a five-point code of conduct that also governs resolution professionals and bankruptcy trustees through sections 93, 120 and 143.

Exam tips

  • Write the six processes with their Part and Chapter. Examiners reward complete lists.
  • Quote the five limbs of section 208(2) in order, then apply the relevant one to the facts.
  • Use the format provision, analysis, conclusion in every case answer.
  • For a pre-pack question, cite section 208(1A) and the section 54F duties, not the CIRP provisions.
  • Mention the Board and IPA oversight briefly to show the full picture.

Practice questions from Insolvency

Functions and Obligations of Insolvency Professionals: frequently asked questions

What does section 208 of the IBC deal with?

It sets out the matters in which an insolvency professional must act and the code of conduct every insolvency professional must follow. Section 208(1) lists the processes, and section 208(2) lists five conduct duties.

Is the pre-packaged insolvency resolution process covered by section 208?

Yes. Clause (ca) of section 208(1) covers it. Section 208(1A) also covers actions taken by the proposed resolution professional before the pre-pack process is initiated.

To whom must an insolvency professional submit records of proceedings?

Under section 208(2)(d), he must submit a copy of the records of every proceeding before the Adjudicating Authority to the Board and to the insolvency professional agency of which he is a member.

Does the code of conduct in section 208 apply to a bankruptcy trustee?

Yes. Section 143 requires the bankruptcy trustee to perform functions and duties in compliance with the code of conduct under section 208. Sections 93 and 120 say the same for the resolution professional.