Section 200 of the Insolvency and Bankruptcy Code, 2016: Principles Governing Registration of Insolvency Professional Agencies
Section 200 sets out five guiding principles that the Insolvency and Bankruptcy Board of India (IBBI) must consider when registering an insolvency professional agency (IPA). The provision focuses on professional competence, ethics, stakeholder protection and the effective functioning of the insolvency system.
Section 200: statutory provision
The section provides that the Board shall have regard to the following principles while registering insolvency professional agencies under the Code:
- Promoting professional development and regulation of insolvency professionals.
- Promoting competent professional services for debtors, creditors and other specified persons.
- Promoting good professional and ethical conduct.
- Protecting the interests of debtors, creditors and other specified persons.
- Promoting the growth of insolvency professional agencies for effective insolvency and bankruptcy resolution.
The five clauses are reproduced below with their wording from the uploaded statutory text and an explanatory note for each.
Five principles explained
Clause (a): Professional development and regulation
to promote the professional development of and regulation of insolvency professionals;
Meaning: IBBI must consider whether an agency will support continuing competence, professional standards and effective oversight of its members.
Clause (b): Competent professional services
to promote the services of competent insolvency professionals to cater to the needs of debtors, creditors and such other persons as may be specified;
Meaning: The framework aims to make qualified practitioners available to those participating in insolvency and bankruptcy proceedings.
Clause (c): Professional and ethical conduct
to promote good professional and ethical conduct amongst insolvency professionals;
Meaning: An agency should foster independence, integrity, accountability and observance of applicable codes of conduct.
Clause (d): Protection of stakeholders
to protect the interests of debtors, creditors and such other persons as may be specified;
Meaning: Registration oversight should account for the interests of participants affected by insolvency proceedings.
Clause (e): Effective insolvency resolution
to promote the growth of insolvency professional agencies for the effective resolution of insolvency and bankruptcy processes under this Code.
Meaning: The statutory objective is a capable ecosystem of agencies that supports effective implementation of the Code.
How Section 200 fits into the registration framework
Insolvency professional agency (IPA): Under Section 3(20) of the Code, an IPA is a person registered with the Board under Section 201 as an insolvency professional agency. An IPA enrols insolvency professionals as members and performs statutory and regulatory functions relating to those members.
Insolvency professional (IP): Under Section 3(19), an IP is a person enrolled under Section 206 with an insolvency professional agency as its member and registered with the Board as an insolvency professional under Section 207.
The Board: The Insolvency and Bankruptcy Board of India is the regulator established under Section 188 of the Code.
- Section 199: Prohibits acting as an insolvency professional agency and enrolling insolvency professionals without the required certificate of registration, subject to exceptions under the Code.
- Section 200: States the five principles that guide the Board when registering an IPA.
- Section 201: Governs registration of insolvency professional agencies, subject to applicable statutory and regulatory requirements.
- Section 204: Sets out functions of insolvency professional agencies, including granting membership, setting professional standards, monitoring members and addressing grievances.
- Section 196: Provides the Board's broader regulatory and supervisory powers.
The IBBI (Insolvency Professional Agencies) Regulations, 2016, as amended from time to time, supplement the Code with detailed requirements. Applicants should consult the current consolidated regulations and official IBBI notifications rather than relying solely on this overview.
Frequently asked questions
Does Section 200 itself authorize an agency to operate?
No. It supplies registration principles. A valid certificate of registration and compliance with the Code and applicable regulations are necessary under the relevant provisions.
Who applies these principles?
The Insolvency and Bankruptcy Board of India applies them while considering registration of insolvency professional agencies.
Why do ethics and stakeholder protection matter?
Insolvency professionals exercise responsibilities affecting debtors, creditors and other stakeholders. Professional standards and oversight help safeguard the integrity of insolvency processes.
Is an insolvency professional agency the same as an insolvency professional?
No. An IPA is the regulated membership and oversight body, whereas an IP is an individual practitioner who must satisfy the applicable enrolment and registration requirements.
Official legal resources
- India Code - official repository of Central legislation (search for the Insolvency and Bankruptcy Code, 2016, Act 31 of 2016).
- Insolvency and Bankruptcy Board of India - official regulations, circulars, notifications and professional agency information.
- Ministry of Corporate Affairs - official corporate and insolvency-related notifications.
For the full legislative context, read the Insolvency and Bankruptcy Code, 2016.
Legal information only. This article explains the statutory framework and does not substitute for the latest official text or professional advice in a specific matter.