CHAPTER IV INSOLVENCY PROFESSIONALSCentral

Section 208 of The Insolvency and Bankruptcy Code, 2016.

(1)Where any insolvency resolution, fresh start, liquidation or bankruptcy process has been initiated, it shall be the function of an insolvency professional to take such actions as may be necessary, in the following matters, namely:
1. (a)a fresh start order process under Chapter II of Part III;
2. (b)individual insolvency resolution process under Chapter III of Part III;
3. (c)corporate insolvency resolution process under Chapter II of Part II; 1[(ca) pre-packaged insolvency resolution process under Chapter III-A of Part II;]
4. (d)individual bankruptcy process under Chapter IV of Part III; and
5. (e)liquidation of a corporate debtor firm under Chapter III of Part II. 1 1[(1A) Where the name of the insolvency professional proposed to be appointed as a resolution professional, is approved under clause (e) of sub-section (2) of section 54A, it shall be the function of such insolvency professional to take such actions as may be necessary to perform his functions and duties prior to the initiation of the pre-packaged insolvency resolution process under Chapter III-A of Part II.]
(2)Every insolvency professional shall abide by the following code of conduct:
1. (a)to take reasonable care and diligence while performing his duties;
2. (b)to comply with all requirements and terms and conditions specified in the bye-laws of the insolvency professional agency of which he is a member;
3. (c)to allow the insolvency professional agency to inspect his records;
4. (d)to submit a copy of the records of every proceeding before the Adjudicating Authority to the Board as well as to the insolvency professional agency of which he is a member; and
5. (e)to perform his functions in such manner and subject to such conditions as may be specified.

Summary

This provision outlines the key roles and duties that an insolvency professional must perform during legal proceedings.
It lists the specific processes a registered practitioner can manage, including fresh starts, individual debt resolutions, and corporate restructurings.
It authorizes these professionals to manage company liquidations and individual bankruptcy processes.
It outlines the prep work required for pre-packaged insolvency processes for small businesses.
It imposes a strict code of conduct, requiring practitioners to work with care, diligence, and allow agency inspections.
It obligates professionals to submit copies of all proceeding records to both the Board and their professional agency.

Practical examples

1Rajesh is appointed to manage the insolvency resolution of a struggling retail chain. Under Section 208 of the Code, he takes control of the business, runs operations diligently, and carefully submits duplicates of all court filings to his agency and the national Board.

2An agency inspector visits Priya's office to examine her records for an ongoing company restructuring case. To follow the Code's rules, Priya cooperates, provides full access, and shows she has exercised reasonable care in her work.

FAQ

1. What are the main functions of an insolvency professional under Section 208 of the Insolvency and Bankruptcy Code, 2016?

Under Section 208 of the Insolvency and Bankruptcy Code, 2016, their functions include managing fresh start processes, individual insolvency resolutions, corporate insolvency resolutions, pre-packaged insolvency processes, individual bankruptcies, and corporate liquidations.

2. What code of conduct must practitioners follow under Section 208 of the Insolvency and Bankruptcy Code, 2016?

Under Section 208 of the Insolvency and Bankruptcy Code, 2016, they must take reasonable care and diligence, comply with agency bye-laws, allow agency inspections, and submit records of all proceedings to both the Board and their agency.

3. To whom must an insolvency professional submit record copies under Section 208 of the Insolvency and Bankruptcy Code, 2016?

Under Section 208 of the Insolvency and Bankruptcy Code, 2016, the practitioner must submit a copy of the records of every proceeding before the Adjudicating Authority to both the Insolvency and Bankruptcy Board of India and the insolvency professional agency of which they are a member.

Test yourself

Q1.Under Section 208 of the Insolvency and Bankruptcy Code, 2016, which of the following is NOT a process that an insolvency professional is authorized to conduct?

Q2.Under Section 208 of the Insolvency and Bankruptcy Code, 2016, what standard of care is expected of an insolvency professional when performing their duties?

Q3.Under Section 208 of the Insolvency and Bankruptcy Code, 2016, what must an insolvency professional do with the records of proceedings held before the Adjudicating Authority?

Q4.If an agency wishes to inspect the records of its member under Section 208 of the Insolvency and Bankruptcy Code, 2016, what is the member's obligation?

Q5.A question under Section 205 and Section 208 of the Insolvency and Bankruptcy Code, 2016: If an agency makes bye-laws under Section 205, is a practitioner bound by them during an active case under Section 208?

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