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CS Professional · Insolvency and Bankruptcy - Law and Practice · Introduction to Insolvency and Bankruptcy Code

Hind Insolvency Professionals Agency is applying for registration with the Insolvency and Bankruptcy Board of India. The Board's registration committee is reviewing the application. Which consideration is among the principles the Board must have regard to under the Code when registering insolvency professional agencies?

The Board must have regard to the principles in Section 200, which include promoting good professional and ethical conduct among insolvency professionals. The principles also cover professional development, competent services, protecting debtors and creditors, and growth of agencies. Dividend maximisation, a CA-only rule and a one-per-State cap are not among them.

  1. AMaximising the dividends paid to the shareholders of the agency
  2. BPromoting good professional and ethical conduct amongst insolvency professionalsCorrect
  3. CEnsuring that the agency enrols only insolvency professionals who are chartered accountants
  4. DLimiting the number of agencies to one in each State to avoid competition

Explanation

Section 200 lists the principles: promoting professional development and regulation, competent services for debtors and creditors, good professional and ethical conduct, protecting the interests of debtors and creditors, and promoting growth of agencies. Ethical conduct is therefore one of them. The other options appear nowhere in the section; the last one in particular conflicts with the aim of promoting growth of agencies.

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