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CS Professional · Corporate Restructuring, Valuation and Insolvency

Role, Functions and Duties of IP, IRP and RP

An insolvency professional (IP) is a person registered to run insolvency processes under the IBC. As IRP or RP, the IP takes charge of the corporate debtor, manages its operations and conducts the process. As liquidator or bankruptcy trustee, the IP runs liquidation or bankruptcy. Every IP must follow the code of conduct in section 208.

What this chapter covers

This chapter is about the person who actually runs an insolvency process. The IBC does not leave the process to the court or the creditors alone. It gives the work to a regulated professional who is registered with an insolvency professional agency and enrolled with the Board. You study who this person is, how the person is regulated, and what the person does in each process.

The chapter has a clear shape. Start with the general position of an insolvency professional and the agency that regulates the IP. Then move through the roles: interim resolution professional (IRP), resolution professional (RP), liquidator and bankruptcy trustee. End with the code of conduct, which applies to all of them. Section 208 is the anchor. It lists the processes in which an IP acts and sets the code of conduct in sub-section (2).

The chapter links to the rest of Paper 6 directly. The corporate insolvency resolution process, the committee of creditors, the resolution plan, liquidation and the pre-packaged process all depend on the IP's duties. If you know who does what and when, those later chapters become easier. In the exam, the facts will usually describe an IP doing something. You will need to decide whether the act is within the IP's powers and whether it meets the code of conduct.

Paper 6 is a written, case-based paper, and the insolvency part carries 40 of the paper's 100 marks. Questions on the IP are favourites because they let the examiner test several rules in one fact pattern: who appoints, what the duty is, what happens after the process period ends, and what the code of conduct requires. The provisions are short and precise, so you can score well by quoting them correctly and applying them to the facts. The chapter also gives you the vocabulary for every other insolvency chapter, so effort here pays off twice.

Role, Functions and Duties of IP, IRP and RP: topics in the order to study them

  1. 1Insolvency Professionals: Registration and RegulationStart with who an IP is and how the profession is regulated, including the principles the Board must keep in mind when registering agencies under section 200.
  2. 2Functions and Obligations of Insolvency ProfessionalsSection 208(1) lists the processes in which an IP acts, and this gives you the map for every role that follows.
  3. 3Interim Resolution Professional: Appointment and DutiesThe IRP is the first person in charge of a corporate debtor, so study this before the RP who takes over.
  4. 4Resolution Professional: Appointment and Powers and DutiesPlaceholder
  5. 5Liquidator and Bankruptcy Trustee: Roles and DutiesThese roles apply when resolution fails or when an individual goes into bankruptcy, so they come after the resolution roles.
  6. 6Standard of Conduct and Code of Conduct for IPsThe code in section 208(2) applies to every role, so it works best as the closing topic that ties the chapter together.

How to prepare Role, Functions and Duties of IP, IRP and RP

This chapter is short in text but heavy on application. Prepare it by learning the sections exactly, then practise using them on facts.

  1. Read sections 200, 208, 23, 93, 120 and 143 in the official text and mark the key words in each.
  2. Make a one-page table of roles: IP, IRP, RP, liquidator, bankruptcy trustee. For each, note the process, who the role serves and the main duty.
  3. Learn section 208(2) as a list of five points in your own words, and be ready to give one example of a breach for each point.
  4. Study section 23 closely: the RP conducts the entire process and manages the corporate debtor's operations, and continues to do so after the process period ends until an order under section 31(1) or a liquidator appointment under section 34.
  5. Compare section 23 with section 54F, which sets out the duties and powers of the RP in the pre-packaged process, so you do not mix up the two.
  6. Write answers to two or three case-based questions in the format of provision, analysis and conclusion, and time yourself.
  7. In the last week, revise only your table and the section 208(2) list.

Common mistakes in Role, Functions and Duties of IP, IRP and RP

  • Saying the RP's role ends the day the CIRP period expires.

    Fix: Quote the proviso to section 23(1): the RP continues to manage the corporate debtor until the Adjudicating Authority passes an order approving the plan or appointing a liquidator.

  • Mixing up the RP's duties in the CIRP with those in the pre-packaged process.

    Fix: Keep section 54F separate. It covers confirming the list of claims, monitoring management, and preparing the information memorandum in the pre-pack.

  • Listing the code of conduct from memory with missing or invented points.

    Fix: Learn the five points of section 208(2) exactly and add other specified conduct only if the question asks for it.

  • Giving a conclusion without applying the rule to the facts.

    Fix: Follow the format: state the provision, link each fact to it, then conclude clearly.

  • Treating IRP, RP, liquidator and bankruptcy trustee as the same role.

    Fix: Tie each role to its process and stage. Use your role table to check which one the facts describe.

Last-day revision: Role, Functions and Duties of IP, IRP and RP

  • An IP acts in fresh start, individual insolvency resolution, CIRP, pre-packaged process, individual bankruptcy and liquidation, as listed in section 208(1).
  • Section 208(2) sets five code-of-conduct duties for every IP.
  • Duty one: take reasonable care and diligence while performing duties.
  • Duty two: comply with the bye-laws of the insolvency professional agency you belong to.
  • Duty three: allow the agency to inspect your records.
  • Duty four: submit a copy of records of every proceeding before the Adjudicating Authority to the Board and to your agency.
  • Duty five: perform functions in the manner and subject to conditions specified.
  • Section 23(1): the RP conducts the entire CIRP and manages the operations of the corporate debtor.
  • The RP continues to manage operations after the process period expires until an order under section 31(1) or section 34 is passed.
  • Under section 23(3), the IRP must hand over all information, documents and records to a newly appointed RP.
  • Sections 93, 120 and 143 require the RP or bankruptcy trustee to follow the section 208 code of conduct.
  • Section 200 principles for registering agencies include promoting competent IPs, ethical conduct and protecting debtors and creditors.

Role, Functions and Duties of IP, IRP and RP practice questions

Role, Functions and Duties of IP, IRP and RP in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Role, Functions and Duties of IP, IRP and RP: frequently asked questions

What is the difference between an IRP and an RP?

The IRP is the professional who takes charge at the start of the corporate insolvency resolution process. The RP then conducts the process and manages the corporate debtor's operations. Under section 23, the RP has the powers and duties of the IRP and the IRP must hand over all information and records to a new RP.

What does section 208 of the IBC cover?

Section 208(1) lists the processes in which an IP takes the necessary actions, such as CIRP, the pre-packaged process, individual bankruptcy and liquidation. Section 208(2) sets the code of conduct every IP must follow.

Do RPs and bankruptcy trustees have to follow the same code of conduct?

Yes. Sections 93 and 120 require the RP to perform functions in compliance with the code under section 208. Section 143 requires the same of the bankruptcy trustee.

How should I answer a case-based question on an IP's conduct?

State the relevant provision first. Then apply it to each fact in the question, such as whether the IP kept records or allowed inspection. End with a clear conclusion on whether the IP acted correctly.