Section 200 of the Insolvency and Bankruptcy Code, 2016: Principles Governing Registration of Insolvency Professional Agency
Section 200 sets out the principles that the Insolvency and Bankruptcy Board of India must have regard to while registering insolvency professional agencies under the Code. The provision focuses on professional development, competence, ethical conduct, stakeholder protection and growth of the insolvency professional agency framework.
Section 200 - Statutory Provision
The Board shall have regard to the following principles while registering the insolvency professional agencies under this Code, namely:-
(a) to promote the professional development of and regulation of insolvency professionals;
(b) to promote the services of competent insolvency professionals to cater to the needs of debtors, creditors and such other persons as may be specified;
(c) to promote good professional and ethical conduct amongst insolvency professionals;
(d) to protect the interests of debtors, creditors and such other persons as may be specified;
(e) to promote the growth of insolvency professional agencies for the effective resolution of insolvency and bankruptcy processes under this Code.
Meaning and Scope of Section 200
Section 200 does not merely prescribe a procedural formality for registration. It identifies the statutory objectives that must guide the Board when considering registration of an insolvency professional agency. These principles connect the registration system with the wider objectives of professional regulation and effective insolvency and bankruptcy resolution.
Professional Development and Regulation
Clause (a) requires the Board to have regard to promotion of the professional development and regulation of insolvency professionals. Insolvency professional agencies therefore form part of the institutional structure through which professional standards, membership requirements and regulatory discipline are maintained.
Competent Insolvency Professionals
Clause (b) focuses on promoting the services of competent insolvency professionals to meet the needs of debtors, creditors and other persons that may be specified. Competence is therefore an express statutory consideration in the registration framework.
Professional and Ethical Conduct
Clause (c) requires promotion of good professional and ethical conduct among insolvency professionals. This principle complements the Code's provisions governing insolvency professional agencies, their bye-laws and the conduct and regulation of their members.
Protection of Stakeholder Interests
Clause (d) requires regard to the interests of debtors, creditors and other specified persons. The registration framework must therefore be viewed not only from the perspective of the applicant agency but also from the perspective of persons affected by insolvency and bankruptcy processes.
Growth of Insolvency Professional Agencies
Clause (e) requires promotion of the growth of insolvency professional agencies for effective resolution of insolvency and bankruptcy processes under the Code. The provision accordingly combines regulatory quality with development of the professional institutional framework.
Section 200 at a Glance
| Clause | Principle | Purpose |
|---|---|---|
| (a) | Professional development and regulation | Support a regulated and professionally developed insolvency profession. |
| (b) | Competent professionals | Promote competent services for debtors, creditors and other specified persons. |
| (c) | Professional and ethical conduct | Promote proper standards of conduct among insolvency professionals. |
| (d) | Stakeholder protection | Protect interests of debtors, creditors and other specified persons. |
| (e) | Growth of agencies | Support effective resolution of insolvency and bankruptcy processes. |
Meaning of 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 prohibits a person from carrying on business as an insolvency professional agency and enrolling insolvency professionals as members except under and in accordance with a certificate of registration issued by the Board.
Relationship with Sections 199 and 201
Section 199 establishes the requirement for a valid certificate of registration. Section 200 states the principles that guide the Board while registering insolvency professional agencies. Section 201 provides the application and registration mechanism, including grant of a certificate subject to conditions specified by regulations and an opportunity of being heard before rejection of an application.
Related IBC Provisions
Section 196: Powers and functions of the Board, including registration and regulation of insolvency professional agencies.
Section 199: Requirement of a valid certificate of registration for an insolvency professional agency.
Section 201: Registration of insolvency professional agencies.
Section 203: Governing Board of an insolvency professional agency.
Section 204: Functions of insolvency professional agencies.
Section 205: Bye-laws of insolvency professional agencies.
Official Legal Resources
India Code - Insolvency and Bankruptcy Code, 2016