Insolvency and Bankruptcy - Law and Practice · Professional and Ethical Practices for Insolvency Practitioners

Insolvency Professional Agency Registration and Section 200 Principles

Updated 11 October 2026 · Fact-checked

An insolvency professional agency (IPA) is a body registered by the Insolvency and Bankruptcy Board of India that enrols and regulates insolvency professionals. Sections 199 to 205 of the IBC cover its registration, principles, governing board, functions and bye-laws. Solve questions by naming the section, applying it to the facts, then concluding.

Understand Insolvency Professional Agencies and Registration Principles

Under the IBC, an insolvency professional cannot work on his own. He must be a member of an insolvency professional agency (IPA). The IPA is a first-level regulator. The Insolvency and Bankruptcy Board of India (the Board) sits above it.

Section 199 is the entry gate. No person may carry on business as an IPA and enrol insolvency professionals as members except under a certificate of registration issued by the Board. Without that certificate, an entity cannot act as an IPA at all.

Section 200 tells the Board what to keep in mind while registering an IPA. There are five principles: promote professional development and regulation of insolvency professionals; promote services of competent professionals for debtors, creditors and other specified persons; promote good professional and ethical conduct; protect the interests of debtors, creditors and other specified persons; and promote the growth of IPAs for effective resolution of insolvency and bankruptcy processes.

Section 201 sets the procedure. You apply to the Board in the specified form, with the specified fee. The Board acknowledges the application within seven days. It may grant a certificate or reject the application by order, but only after giving the applicant a hearing. A rejection order is communicated within fifteen days. The Board can renew the certificate, and can suspend or cancel it on the grounds listed in section 201(5), after a reasonable hearing and only by an order of whole-time members.

Once registered, the IPA runs itself through bye-laws (section 205) and a governing board (section 203), and performs the functions in section 204. The Board's model bye-law powers are in section 196(2). Keep these sections separate in your answer.

Key rules to remember

Section 199 - bar on functioning without registration: No valid certificate of registration from the Board = no business as an IPA and no enrolment of insolvency professionals; Applies to carrying on business as an IPA under the Code. The wording begins 'Save as otherwise provided in this Code'.
Section 200 - five principles for registration: (a) professional development and regulation; (b) competent services to debtors, creditors and other specified persons; (c) good professional and ethical conduct; (d) protect interests of debtors, creditors and other specified persons; (e) growth of IPAs for effective resolution; These guide the Board while registering IPAs. Learn them as a list of five.
Section 201 - registration timelines: Acknowledge application: within 7 days. Communicate rejection order: within 15 days. No rejection without hearing.; Both timelines run from different events: seven days from receipt of application, fifteen days for communicating the order.
Section 201(5) - suspension or cancellation grounds: False statement or unlawful means; failure to comply with regulations or bye-laws; contravention of the Act, rules or regulations; other ground specified by regulations; Reasonable opportunity of being heard is mandatory. The order cannot be passed by any member except whole-time members of the Board.
Section 203 - governing board: Board may make regulations on: setting up a governing board; minimum number of independent members; number of insolvency professional members on it; The Act itself does not fix the numbers. Regulations do.
Section 204 - functions of an IPA: Grant membership; lay down conduct standards; monitor members; safeguard members' rights and interests; suspend or cancel membership per bye-laws; redress grievances of consumers; publish information; Seven functions, (a) to (g).
Section 205 - bye-laws: IPA makes bye-laws, with Board approval, consistent with the model bye-laws specified under section 196(2); The bye-laws are subject to the Code, rules and regulations.

How to solve Insolvency Professional Agencies and Registration Principles questions

Most questions give a fact situation about an IPA or a member and ask what the law says. Use this sequence.

1Identify the issue: is it registration, principles, governing board, functions, bye-laws, or the Board's powers?
2Name the section: 199 (bar), 200 (principles), 201 (registration and cancellation), 203 (governing board), 204 (functions), 205 (bye-laws), 196 (Board's powers and model bye-laws).
3State the rule in plain words, with its exact conditions, such as hearing, time limits and who may pass the order.
4Apply the rule to the facts. Quote the facts: who applied, what was done, what time passed.
5Check procedural safeguards: was an opportunity of being heard given? Was the order made by whole-time members?
6Conclude clearly in one or two sentences, and add a practical point such as the IPA's duty to publish information or monitor members.

Quickest way: Section map for IPA questions

When to use it: Use when you have limited time and must identify the right provision fast.

Who can act as an IPA? Section 199, only with a Board certificate.
Why is the IPA being registered? Section 200 principles.
How is it registered or cancelled? Section 201.
How is it governed? Section 203 (board) and section 205 (bye-laws).
What does it do? Section 204.
What can the Board do? Section 196.
Write the section number first, then the rule, then the application.

Common mistakes in Insolvency Professional Agencies and Registration Principles

Treating section 200 as a list of IPA functions.
Both lists use words like conduct and competence, so they blur together.
Fix: Section 200 is guidance for the Board when registering. Section 204 lists what the IPA does after registration.
Mixing the seven-day and fifteen-day periods in section 201.
Both appear in provisos of the same section.
Fix: Seven days: acknowledge the application. Fifteen days: communicate a rejection order to the applicant.
Saying the Board can cancel registration without hearing the IPA.
Students focus on the grounds and forget the provisos.
Fix: Always state that a reasonable opportunity of being heard is required, and that only whole-time members of the Board can pass the order.
Saying the IPA makes bye-laws on its own.
The word bye-laws suggests internal autonomy.
Fix: Under section 205, bye-laws need Board approval and must be consistent with the model bye-laws under section 196(2).
Stating fixed numbers for independent members on the governing board.
Students recall numbers from regulations or guesses.
Fix: Section 203 only empowers the Board to specify the numbers by regulations. Say that, and do not quote a number unless you know the regulation.
Confusing the Board's functions (section 196) with IPA functions (section 204).
Both include monitoring and grievance redressal.
Fix: Board: registers and regulates IPAs, professionals and information utilities. IPA: regulates its own members. Tie each function to the right body.

Worked examples

Example 1

Vidhya Insolvency Forum, a company in Pune, enrols insolvency professionals as members and offers to supervise their work, but it has not applied to the Board for registration. Advise whether it can do so under the IBC.

Show the solution

Issue: can a body function as an insolvency professional agency without registration?
Rule: section 199 says no person shall carry on business as an IPA under the Code and enrol insolvency professionals as members except under a certificate of registration issued by the Board.
Application: Vidhya has not applied and holds no certificate. It is enrolling insolvency professionals as members, which is the exact activity barred.
Conclusion and practical point: it cannot act as an IPA. It must apply to the Board under section 201 in the specified form with the specified fee, and may act only after a certificate is granted.

Answer: Vidhya Insolvency Forum cannot function as an IPA or enrol insolvency professionals under the Code until the Board grants it a certificate of registration, as required by section 199.

Example 2

The Board rejected the application of Kaveri Professionals Agency for registration as an IPA without giving it any hearing, and communicated the order after 20 days. Examine the validity of the Board's action.

Show the solution

Issue: did the Board follow section 201(2) in rejecting the application?
Rule: the Board may reject an application by order, but no order of rejection may be made without giving the applicant an opportunity of being heard. Every such order must be communicated to the applicant within fifteen days.
Application, first defect: no hearing was given, which breaches the first proviso.
Application, second defect: the order was communicated after 20 days, beyond the fifteen days allowed by the second proviso.
Conclusion: the Board's action does not comply with section 201(2) on two counts. Kaveri can challenge the order and seek a fresh consideration after a hearing.

Answer: The rejection is not in accordance with section 201(2) because no hearing was given and the order was communicated after the fifteen-day limit.

Exam tips

Write the section number beside each rule. Examiners reward the provision-analysis-conclusion format.
Learn the five section 200 principles as keywords: development, competent services, ethical conduct, protection of interests, growth of IPAs.
For cancellation questions, always mention the hearing and the whole-time members condition.
Keep section 204 functions as a seven-item list. A question may ask you to list or explain any of them.
For drafting-type questions, state the compliance point: bye-laws need Board approval and must follow the model bye-laws.

Practice questions from Professional and Ethical Practices for Insolvency Practitioners

Insolvency Professional Agencies and Registration Principles: frequently asked questions

What are the principles governing registration of an insolvency professional agency?

Section 200 lists five principles the Board must consider. They are professional development and regulation, competent services for debtors and creditors, good ethical conduct, protection of the interests of debtors, creditors and other specified persons, and growth of IPAs for effective resolution.

Who registers an insolvency professional agency?

The Insolvency and Bankruptcy Board of India registers it under section 201 on an application in the specified form and fee. It may also renew, suspend or cancel the certificate.

Can an IPA make its own bye-laws?

Yes, but under section 205 it must obtain the Board's approval. The bye-laws must be consistent with the model bye-laws that the Board specifies under section 196(2).

What is the difference between section 196 and section 204?

Section 196 sets out the powers and functions of the Board, including registering and monitoring IPAs. Section 204 sets out the functions of an IPA itself, such as granting membership and monitoring its own members.