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

Insolvency Professionals: Registration and Regulation under IBC

Updated 11 October 2026 · Fact-checked

An insolvency professional (IP) must first be enrolled as a member of an insolvency professional agency (IPA) and then be registered with the IBBI. Without both, no one can act as an IP under the Code (Section 206). The IBBI registers and regulates IPAs and IPs. IPAs enrol members and discipline them.

Understand Insolvency Professionals: Registration and Regulation

The Insolvency and Bankruptcy Code, 2016 uses a three-layer structure to regulate the people who run insolvency cases. At the top is the Insolvency and Bankruptcy Board of India (IBBI), the Board. In the middle are insolvency professional agencies (IPAs). At the base are the insolvency professionals (IPs), who work as interim resolution professional, resolution professional, liquidator or bankruptcy trustee.

The key rule is Section 206. No person can render services as an insolvency professional under the Code unless he is enrolled as a member of an IPA and registered with the Board. Both steps are needed. Enrolment alone is not enough, and registration alone is not possible without enrolment.

The order is fixed by Section 207(1). An IP must first obtain membership of an IPA. Then he registers with the Board, within the time, in the manner and on payment of the fee specified by regulations. Section 207(2) lets the Board specify categories of professionals or persons with qualifications and experience in finance, law, management, insolvency or other fields it considers fit.

An IPA is itself a regulated body. Under Section 199, no person can run an IPA and enrol IPs as members without a certificate of registration from the Board. So the IBBI regulates the IPAs, and the IPAs act as front-line regulators of their members through bye-laws, examinations, monitoring and discipline.

Think of it this way: the IPA is like a professional body and the IBBI is the statutory regulator above it. Exam questions test who does what, in which order, and on what grounds registration can be refused, suspended or cancelled.

Key rules to remember

No practice without both steps: IP = enrolled with an IPA + registered with the Board (Section 206); Both conditions must be met before anyone renders services as an IP under the Code.
Sequence for an IP: Membership of IPA first, then registration with the Board (Section 207(1)); Registration is within the time, manner and fee specified by regulations.
Categories of IP: Board may specify categories by qualification and experience in finance, law, management, insolvency or other fields (Section 207(2)); The Code does not itself list a single fixed qualification here. The Board specifies it.
IPA needs registration: No IPA business or enrolment of IPs without a certificate of registration from the Board (Section 199); Applies to the agency, not the professional.
Application for IPA registration: Acknowledge within 7 days; communicate rejection order within 15 days (Section 201); A rejection order needs a prior opportunity of being heard.
Suspension or cancellation of IPA registration: Grounds: false statement or misrepresentation; non-compliance with regulations or bye-laws; contravention of Act, rules or regulations; other specified grounds (Section 201(5)); Reasonable opportunity of hearing is needed. The order can be passed only by whole-time members of the Board.
Principles for registering IPAs: Section 200: five principles; Professional development and regulation; competent IPs for debtors and creditors; good professional and ethical conduct; protect interests of debtors, creditors and others; promote growth of IPAs for effective resolution.
Governing board of IPA: Board may make regulations on setting up a governing board, minimum independent members and number of IPs on it (Section 203); Aim: IPAs must take into account the objectives of the Code.
Regulatory fee on resolution plan: 0.25% of realisable value to creditors, payable to the Board where realisable value is more than liquidation value (Regulation 31A(1)); Applies to plans approved under section 31 on or after 1 October 2022. Not payable where the plan for a real estate project is from an association or group of allottees.
Regulatory fee on hired professionals: 1% of cost booked in CIRP costs for hiring professionals or other services by IRP or RP (Regulation 31A(2)); Payable to the Board in the manner in the IP Regulations.

How to solve Insolvency Professionals: Registration and Regulation questions

Use this method for any written question on registration and regulation of IPs and IPAs. Keep to the pattern of provision, facts, conclusion.

1Identify who the question is about: an individual professional, an IPA or the Board. The rules differ for each.
2State the governing provision in plain words, for example Section 206 for practice, Section 207 for registration, Section 199 or 201 for IPAs.
3Apply it to the facts. Check whether the person is enrolled with an IPA, registered with the Board, and in which order.
4If the question is about refusal, suspension or cancellation, check the grounds and whether a hearing was given. Check also who may pass the order.
5If the question is about the Board's role, link the act to the right function in Section 196(1), such as registering, inspecting, monitoring or redressing grievances.
6If fees are involved, identify whether it is Regulation 31A(1) or 31A(2) and compute the percentage on the correct base.
7Write a clear conclusion in one sentence, for example whether the person can act as IP, or whether the order is valid.

Quickest way: Two-gate test for any IP or IPA question

When to use it: Use it when the facts are short and you need a quick, safe answer in the time available.

Gate 1: Is the person a member of an IPA? If no, stop. He cannot act (Section 206).
Gate 2: Is he registered with the Board? If no, stop. He cannot act.
If the subject is an IPA, ask: does it hold a certificate of registration from the Board (Section 199)? If no, it cannot enrol IPs.
For any adverse order against an IPA, check hearing given and whole-time members passed it (Section 201(5)).
Write the conclusion and cite the section.

Common mistakes in Insolvency Professionals: Registration and Regulation

Saying registration with the IBBI alone allows a person to act as IP.
Students remember the Board as the main regulator and forget the enrolment step.
Fix: Always write both: enrolled with an IPA and registered with the Board (Section 206).
Reversing the order, registering with the Board first and then joining an IPA.
The word 'registration' feels like the first step.
Fix: Section 207(1) says after obtaining membership of an IPA, the IP registers with the Board. Membership comes first.
Confusing an IP with an IPA.
The names are similar and the abbreviations differ by one letter.
Fix: An IP is the individual who handles cases. An IPA is the agency that enrols and regulates IPs, and itself needs the Board's registration.
Stating a fixed academic qualification as given in the Code for IPs.
Students recall eligibility rules from regulations or study material and attribute them to the Act.
Fix: Say the Board specifies categories and eligibility by regulations under Section 207(2) and Section 196(1)(b). Do not give a number or qualification you cannot place.
Forgetting natural justice when an IPA's registration is cancelled.
Students focus on the grounds and skip the provisos.
Fix: Add that a reasonable opportunity of being heard is needed and that the order is passed only by whole-time members of the Board.
Applying the 0.25% regulatory fee to every plan.
Students miss the condition that realisable value must exceed liquidation value.
Fix: State the condition, the 1 October 2022 date and the exclusion for allottee-led plans for real estate projects.

Worked examples

Example 1

Rohan, a chartered accountant, has registered himself with the IBBI but has not become a member of any insolvency professional agency. A creditor wants to appoint him as resolution professional. Advise.

Show the solution

Provision: Section 206 says no person shall render services as an insolvency professional unless he is enrolled as a member of an IPA and registered with the Board.
Sequence: Section 207(1) requires an IP to obtain membership of an IPA and then register with the Board.
Facts: Rohan is not enrolled with any IPA. Registration without enrolment does not satisfy Section 206.
Conclusion: He cannot be appointed or act as resolution professional until he is enrolled with an IPA and holds valid registration.

Answer: Rohan cannot act as resolution professional. He must be both enrolled with an IPA and registered with the IBBI, and enrolment must come first.

Example 2

The IBBI plans to cancel the certificate of registration of Sahyadri Insolvency Professionals Agency for contravening the regulations. Without notice, a single part-time member of the Board passes the order. Examine its validity.

Show the solution

Provision: Under Section 201(5), the Board may suspend or cancel an IPA's registration for grounds such as non-compliance with regulations or bye-laws, or contravention of the Code, rules or regulations.
Ground: Contravention of regulations is a valid ground.
Hearing: The first proviso says no order can be made unless the IPA has been given a reasonable opportunity of being heard. Here no notice was given.
Competence: The second proviso says no such order shall be passed by any member except whole-time members of the Board. A part-time member cannot pass it.
Conclusion: The ground exists, but the procedure is defective on two counts.

Answer: The order is invalid. A valid ground exists, but the IPA was not heard and the order was not passed by a whole-time member of the Board.

Exam tips

Write both requirements for an IP, enrolment and registration, in the first line of your answer. Cite Section 206.
Learn the five principles in Section 200 and the key functions in Section 196(1). Questions often ask you to list or explain them.
For IPA questions, remember the numbers in Section 201: 7 days for acknowledgement and 15 days for communicating a rejection order.
Do not quote eligibility figures that the official text does not give. Say the Board specifies them by regulations.
In case-based questions, end with a clear conclusion after applying the section to the facts.

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

Insolvency Professionals: Registration and Regulation: frequently asked questions

What is the difference between an insolvency professional and an insolvency professional agency?

An insolvency professional is the individual who conducts insolvency processes. An insolvency professional agency is a body registered with the IBBI that enrols IPs as members and regulates them through bye-laws. The IP must be a member of an IPA and registered with the Board.

Can a person act as an IP after registering with the IBBI only?

No. Section 206 requires both enrolment as a member of an IPA and registration with the Board. Section 207(1) also says registration follows membership of an IPA.

Who decides the eligibility to become an insolvency professional?

The Board specifies the minimum eligibility requirements and may specify categories of persons by qualification and experience in fields such as finance, law, management and insolvency. See Section 196(1)(b) and Section 207(2). Refer to the current IBBI regulations for the exact conditions.

What can the IBBI do against an IPA that breaks the rules?

The Board can suspend or cancel the IPA's certificate of registration on the grounds in Section 201(5), after giving a reasonable opportunity of being heard. It can also inspect, investigate, monitor, call for information and issue directions under Section 196.

Is the regulatory fee on a resolution plan always 0.25%?

No. Under Regulation 31A(1) it is 0.25% of the realisable value to creditors, and only where that value is more than the liquidation value and the plan is approved on or after 1 October 2022. It is not payable for a real estate project plan from an association or group of allottees.