Section 199 of the Insolvency and Bankruptcy Code, 2016: Registration of Insolvency Professional Agency
Section 199 creates the basic registration requirement for an insolvency professional agency. Except where the Code otherwise provides, a person cannot carry on business as an insolvency professional agency or enrol insolvency professionals as members unless it acts under and in accordance with a valid certificate of registration issued by the Insolvency and Bankruptcy Board of India.
Section 199 - Statutory Provision
Save as otherwise provided in this Code, no person shall carry on its business as insolvency professional agencies under this Code and enrol insolvency professionals as its members except under and in accordance with a certificate of registration issued in this behalf by the Board.
Meaning and Scope of Section 199
Section 199 is located in Chapter III of Part IV of the Code, which regulates insolvency professional agencies. It makes registration with the Board a statutory condition for carrying on the business of an insolvency professional agency and enrolling insolvency professionals as its members.
What Is an Insolvency Professional Agency?
Section 3(20) defines an "insolvency professional agency" as any person registered with the Board under Section 201 as an insolvency professional agency. Section 199 therefore operates together with the registration provisions in Sections 200 and 201.
Certificate of Registration
The IBBI (Insolvency Professional Agencies) Regulations, 2016 define a "certificate of registration" as a certificate of registration granted or renewed by the Board under those Regulations. The Regulations provide the regulatory framework for registration and continuing compliance of insolvency professional agencies.
Core Requirements of Section 199
| Requirement | Legal Effect |
|---|---|
| Registration | An insolvency professional agency must operate under a certificate of registration issued by IBBI. |
| Compliance with certificate | The agency must act in accordance with the certificate of registration and the applicable statutory framework. |
| Enrolment of professionals | Enrolment of insolvency professionals as members is tied to the registered insolvency professional agency framework. |
| Exception | The opening words preserve any situation otherwise provided in the Code. |
Registration Under Section 201
Section 201 provides the statutory mechanism for an application for registration as an insolvency professional agency. The Board may grant a certificate of registration in the prescribed form and manner, subject to conditions specified by regulations, or reject an application after giving the applicant a reasonable opportunity of being heard.
Principles Under Section 200
While registering insolvency professional agencies, the Board must have regard to the principles stated in Section 200. These include promoting professional development and regulation of insolvency professionals, promoting the services of competent insolvency professionals, promoting good professional and ethical conduct, protecting the interests of debtors, creditors and other specified persons, and promoting the growth of insolvency professional agencies for effective resolution of insolvency and bankruptcy processes.
Related IBC Provisions
Section 196: Powers and functions of the Board, including registration and regulation of insolvency professional agencies.
Section 200: Principles governing registration of an insolvency professional agency.
Section 201: Registration of an insolvency professional agency.
Section 202: Appeal to the National Company Law Appellate Tribunal against specified orders of the Board.
Section 203: Governing Board of an insolvency professional agency.
Sections 204 and 205: Functions of insolvency professional agencies and their bye-laws.
Official Legal Resources
India Code - Central Acts and Legislation
IBBI - Insolvency and Bankruptcy Code and Amendment Acts