- IBBI notified amendments to the Insolvency Resolution Process (IRP) and Bankruptcy Process (BP) for Personal Guarantors (PGs) to Corporate Debtors (CDs).
- Key highlights of the amendments
- Allows appointment of same Insolvency Professional (IP) in corporate process as well as insolvency and bankruptcy proceeding of the PGs to CDs.
- IP is an individual registered with IBBI who act as intermediary in insolvency and bankruptcy processes.
- Makes convening of meeting of creditors mandatory.
- Allows appointment of same Insolvency Professional (IP) in corporate process as well as insolvency and bankruptcy proceeding of the PGs to CDs.
- IBBI also issued Clarifications on Regulatory Framework for IPs and Insolvency Professional Entities (IPEs), which includes:
- Limit on number of assignments for IPs does not apply to an IP which is an IPE.
- IPEs can be a company, limited liability partnership, registered partnership firm, which are allowed to carry on activities of an IP.
- Fee structure for IPEs acting as IPs should be market-determined.
- Limit on number of assignments for IPs does not apply to an IP which is an IPE.
- Significance
- Efficient functioning of IPEs by removing ambiguities in its roles and responsibilities.
- Better harmonization and effective coordination between insolvency and bankruptcy processes.
- Reinforcing a robust and equitable framework for addressing financial distress in PG cases.
Insolvency and Bankruptcy Board of India
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