Corporate Restructuring, Valuation and Insolvency · Role, Functions and Duties of IP, IRP and RP

Functions and Obligations of Insolvency Professionals under Section 208 IBC

Updated 11 October 2026 · Fact-checked

Section 208 of the IBC says that once an insolvency resolution, fresh start, liquidation or bankruptcy process begins, the insolvency professional must take the actions necessary in that process. It also sets a five-point code of conduct: care and diligence, agency bye-laws, inspection, filing records, and performing functions as specified.

Understand Functions and Obligations of Insolvency Professionals

An insolvency professional (IP) is the person who actually runs an insolvency process. The Adjudicating Authority and creditors decide big issues, but the IP does the work: collects information, manages the debtor, and moves the process forward.

Section 208(1) lists the processes where the IP acts. They are: fresh start order process (Chapter II of Part III), individual insolvency resolution process (Chapter III of Part III), corporate insolvency resolution process (Chapter II of Part II), pre-packaged insolvency resolution process (Chapter III-A of Part II), individual bankruptcy process (Chapter IV of Part III), and liquidation of a corporate debtor firm (Chapter III of Part II). The trigger is that the process has been initiated. The IP must take such actions as may be necessary in these matters.

Section 208(1A) covers the time before a pre-pack starts. If the IP's name is approved under section 54A(2)(e) as the proposed resolution professional, the IP must take the actions necessary to perform his functions and duties prior to initiation of the pre-packaged process.

Section 208(2) is the code of conduct written into the Act. 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 IP wears different titles in different processes, such as interim resolution professional, resolution professional, liquidator or bankruptcy trustee. Section 208 is the general base. The specific powers sit in other sections, for example section 35 for the liquidator. Keep the general duty and the specific powers apart in your answer.

Key rules to remember

Section 208(1): scope of functions: Process initiated → IP takes actions necessary in the matter; Covers fresh start, individual resolution, CIRP, pre-pack, individual bankruptcy and liquidation of a corporate debtor firm.
Section 208(1A): pre-pack stage: Name approved under section 54A(2)(e) → IP performs functions and duties before pre-pack initiation; Applies to the proposed resolution professional before the process formally starts.
Section 208(2): code of conduct: (a) care and diligence; (b) IPA bye-laws; (c) IPA inspection of records; (d) copy of records of every Adjudicating Authority proceeding to Board and IPA; (e) functions as specified; Five duties. Remember them as care, bye-laws, inspection, records, specified manner.
Section 35(1): liquidator's powers (specific example): Verify claims; take custody of assets; evaluate assets; protect assets; carry on business; sell property; investigate undervalued or preferential transactions; and others; Subject to Adjudicating Authority directions. A liquidator may not sell property to a person not eligible to be a resolution applicant.
Section 196(1)(a), (d), (f): Board registers IPs, specifies standards, inspects and investigates; Shows who regulates the IP whose duties section 208 sets.

How to solve Functions and Obligations of Insolvency Professionals questions

Use this method for any question on the functions or obligations of an insolvency professional.

1Identify the process in the facts: CIRP, pre-pack, liquidation, fresh start, individual resolution or bankruptcy.
2State the rule: under section 208(1), once the process is initiated, the IP takes the actions necessary in that matter.
3Check the stage: if the process has not yet begun but the name is approved under section 54A(2)(e), apply section 208(1A).
4List the facts that show a duty issue, then match each to one clause of section 208(2): care, bye-laws, inspection, records or specified manner.
5Add the specific power or duty from the relevant section if asked, such as section 35 for a liquidator.
6Mention the regulator's role: the Board under section 196 and the IPA can inspect, monitor and act on complaints.
7Conclude plainly: say whether the IP complied or breached, and name the clause.

Quickest way: Five-clause scan

When to use it: Case-based questions where an IP's conduct is described and you must say if section 208(2) is breached.

Read the facts once and underline each action of the IP.
Tag each action with a clause letter (a) to (e).
Write one line per clause: rule, fact, conclusion.
Close with the consequence: possible action by the IPA or the Board.

Common mistakes in Functions and Obligations of Insolvency Professionals

Saying section 208 applies only to CIRP.
CIRP is the most discussed process.
Fix: List all six processes in section 208(1), including fresh start, individual processes, pre-pack and liquidation.
Writing that the IP must submit records to the Adjudicating Authority.
Students mix up the source and the recipient of the records.
Fix: Section 208(2)(d): the IP submits a copy of records of every proceeding before the Adjudicating Authority to the Board and to his IPA.
Leaving out the IPA bye-laws duty.
Students focus on the Code and forget agency rules.
Fix: Cite section 208(2)(b): the IP must comply with the IPA's bye-laws, terms and conditions.
Treating section 208 as the source of all liquidator powers.
Both deal with functions of professionals.
Fix: Use section 208 for general functions and code of conduct. Use section 35 for the liquidator's specific powers.
Ignoring section 208(1A) for pre-packs.
It is a short sub-section inserted later.
Fix: Remember that a proposed RP approved under section 54A(2)(e) already has duties before the pre-pack starts.
Quoting the code of conduct as a list of four items.
Students forget clause (e).
Fix: Count five: care, bye-laws, inspection, records, specified manner.

Worked examples

Example 1

Explain the functions and code of conduct of an insolvency professional under section 208 of the IBC. (Answer in brief.)

Show the solution

Provision: section 208(1) says that where an insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, the IP takes such actions as are necessary in the matter.
Processes covered: fresh start order process, individual insolvency resolution process, CIRP, pre-packaged insolvency resolution process, individual bankruptcy process and liquidation of a corporate debtor firm.
Pre-pack stage: under section 208(1A), an IP whose name is approved under section 54A(2)(e) performs functions and duties before the pre-pack is initiated.
Code of conduct under section 208(2): take reasonable care and diligence; comply with the IPA's bye-laws; allow the IPA to inspect records; submit a copy of records of every proceeding before the Adjudicating Authority to the Board and the IPA; perform functions in the manner and subject to the conditions specified.

Answer: Section 208 requires the IP to take necessary actions in each listed process and to follow the five-point code of conduct in section 208(2).

Example 2

Mr. Sharma, an IP and member of an IPA, is the resolution professional of Kaveri Textiles Ltd. The IPA asks to inspect his records of the CIRP. He refuses, saying the records are confidential. He also never sends the Board a copy of the records of proceedings before the Adjudicating Authority. Advise on his position.

Show the solution

Provision: section 208(2)(c) requires every IP to allow the IPA of which he is a member to inspect his records.
Analysis of the first fact: confidentiality is not an exception in the clause. His refusal breaches section 208(2)(c).
Provision: section 208(2)(d) requires submission of a copy of the records of every proceeding before the Adjudicating Authority to the Board and to the IPA.
Analysis of the second fact: he has not sent copies to the Board, so clause (d) is also breached. Clause (b) may be engaged too if the IPA's bye-laws require cooperation.
Consequence: the Board can monitor and call for records under section 196(1)(f), (g) and (h), and the IPA can act under its bye-laws.

Answer: Mr. Sharma has breached section 208(2)(c) and (d). He must allow inspection and submit the records, or face action by the IPA and the Board.

Exam tips

Learn the five clauses of section 208(2) in order and write them as numbered points.
In case questions, tie each fact to a clause letter. Provision, facts, conclusion earns the marks.
Quote section 208(1A) and section 54A(2)(e) together when a pre-pack is in the facts.
Do not mix up the roles of the Board (regulator) and the IPA (member agency) when records are involved.

Practice questions from Role, Functions and Duties of IP, IRP and RP

Functions and Obligations of Insolvency Professionals: frequently asked questions

What does section 208 of the IBC cover?

It sets the functions of an insolvency professional in the processes listed in section 208(1) and sets the code of conduct in section 208(2). It also covers the proposed resolution professional before a pre-pack begins.

What is the code of conduct of an IP under section 208(2)?

The IP must take reasonable care and diligence, comply with the IPA's bye-laws, allow the IPA to inspect records, submit copies of records of Adjudicating Authority proceedings to the Board and the IPA, and perform functions in the specified manner.

Does section 208 cover liquidation?

Yes. Section 208(1)(e) covers liquidation of a corporate debtor firm under Chapter III of Part II. The liquidator's detailed powers are in section 35.

Who regulates insolvency professionals?

The Board registers IPs and IPAs, specifies standards, and can inspect, investigate and monitor them under section 196. IPAs also supervise their members through bye-laws.