Section 206 IBC: Enrolment and Registration of Insolvency Professionals
Section 206 of the Insolvency and Bankruptcy Code, 2016 (IBC) sets out a mandatory two-part requirement for anyone wishing to provide services as an insolvency professional under the Code: enrolment with an insolvency professional agency and registration with the Insolvency and Bankruptcy Board of India (IBBI).
Section 206: Statutory provision
206. Enrolled and registered persons to act as insolvency professionals.No person shall render his services as insolvency professional under this Code without being enrolled as a member of an insolvency professional agency and registered with the Board.
Section 206 is expressed as a prohibition: a person cannot act in the regulated capacity of an insolvency professional unless both conditions are met. The statutory text does not itself set out examination eligibility, forms, fees or detailed procedural steps; those matters are governed by other provisions and applicable IBBI regulations.
Meaning of important terms
Insolvency professional
Section 3(19) defines an insolvency professional as 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.
Insolvency professional agency (IPA)
Under Section 3(20), an insolvency professional agency means a person registered with IBBI under Section 201 as an insolvency professional agency. Such agencies enrol insolvency professionals, monitor their conduct and perform other functions under Section 204.
The Board
In this context, the Board means the Insolvency and Bankruptcy Board of India (IBBI), established under the Code. It regulates the registration and professional conduct of insolvency professionals, among other statutory functions.
How to become eligible to act as an insolvency professional
- Check current eligibility: Review the IBBI (Insolvency Professionals) Regulations, 2016, as amended, for qualifications, experience, examination and other eligibility criteria relevant to the applicable route.
- Meet examination and training requirements: Where applicable, complete the prescribed insolvency examination, pre-registration educational course or other regulatory requirements. Requirements can vary by category and change over time.
- Enrol with a recognised IPA: Apply for membership with an insolvency professional agency registered with IBBI and meet its approved bye-laws and membership conditions.
- Obtain IBBI registration: Apply for registration under Section 207 and the applicable regulations; do not treat IPA membership as equivalent to IBBI registration.
- Check authorisation before accepting assignments: Where the current regulations require an authorisation for assignment (AFA), ensure that it is valid before accepting or undertaking an assignment.
The IBBI legal framework portal is the appropriate starting point for the latest eligibility rules, application forms, amendments and circulars. Do not rely solely on an older summary when planning to apply.
What Section 206 means in practice
Enrolment and registration are distinct
An IPA grants membership under its approved bye-laws, whereas IBBI grants statutory registration. A candidate must satisfy both requirements to provide insolvency professional services under the IBC.
Registration does not automatically authorise every assignment
Once registered, an insolvency professional must also meet applicable continuing requirements, including the regulatory rules concerning authorisation for assignment, independence, eligibility for a particular appointment, disclosures and professional conduct. Specific roles such as interim resolution professional, resolution professional, liquidator or bankruptcy trustee carry further duties under the Code and applicable regulations.
Professional standards and accountability
Under Section 208, insolvency professionals must perform statutory functions and comply with prescribed obligations and the applicable code of conduct. IPAs also supervise members under Section 204. Non-compliance may lead to regulatory or disciplinary consequences under the applicable framework.
Related provisions of the Insolvency and Bankruptcy Code
| Provision | Subject and relevance |
|---|---|
| Section 3(19) | Definition of an insolvency professional. |
| Section 3(20) | Definition of an insolvency professional agency. |
| Section 196 | Powers and functions of IBBI, including professional regulation. |
| Section 199 | Requirement for an IPA to hold valid registration. |
| Section 201 | Registration of insolvency professional agencies. |
| Section 204 | Functions of IPAs, including enrolment and oversight of members. |
| Section 205 | IPAs to make bye-laws consistent with the model bye-laws, subject to IBBI approval. |
| Section 206 | Dual requirement of IPA enrolment and IBBI registration for professionals. |
| Section 207 | Registration of insolvency professionals with IBBI. |
| Section 208 | Functions and obligations of insolvency professionals. |
The IBBI (Insolvency Professionals) Regulations, 2016, as amended, prescribe additional requirements concerning eligibility, registration, professional conduct and authorisation for assignment. The IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 also inform IPA membership arrangements. Check their current versions on the official IBBI portal.
Frequently asked questions
Is membership in an IPA enough to practise as an insolvency professional?
No. Section 206 requires both IPA membership and registration with IBBI.
Can an IBBI-registered professional accept an assignment without a current AFA?
Where an authorisation for assignment is required by the applicable IBBI regulations, a professional must hold the required valid authorisation before accepting or undertaking the assignment.
Does Section 206 apply to every lawyer, accountant or financial adviser?
No. It concerns persons rendering services as insolvency professionals under the IBC. Ordinary professional advice outside that regulated role does not by itself constitute acting as an insolvency professional.
Where can a person check current registration rules?
Consult the official IBBI website and its legal framework repository for current regulations and amendments.
Official legal resources
- India Code - Central legislation, including the Insolvency and Bankruptcy Code, 2016
- Insolvency and Bankruptcy Board of India - official website
- IBBI legal framework - regulations, amendments and notifications
Read the Insolvency and Bankruptcy Code, 2016 - section-wise guide.
This article provides general legal information. Verify the latest IBBI regulations and notifications before relying on any application or assignment requirement.