Section 203 of the Insolvency and Bankruptcy Code, 2016: Governing Board of Insolvency Professional Agency
Section 203 empowers the Insolvency and Bankruptcy Board of India to make regulations governing the board structure of every insolvency professional agency so that the agency takes into account the objectives sought to be achieved under the Code.
Section 203 - Statutory Provision
The Board may, for the purposes of ensuring that every insolvency professional agency takes into account the objectives sought to be achieved under this Code, make regulations to specify-
(a) the setting up of a governing board of an insolvency professional agency;
(b) the minimum number of independent members to be on the governing board of the insolvency professional agency; and
(c) the number of the insolvency professionals being its members who shall be on the governing board of the insolvency professional agency.
Meaning and Scope of Section 203
Section 203 is an enabling provision. It authorises IBBI to prescribe the governance structure of insolvency professional agencies through regulations. The statutory focus is on the constitution of the governing board, independent representation and representation of insolvency professionals who are members of the agency.
Meaning of Governing Board
Under the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016, the term "Governing Board" refers to the board of directors, as defined in Section 2(10) of the Companies Act, 2013, of the company registered as an insolvency professional agency.
Independent Members
Section 203(b) expressly authorises IBBI to specify the minimum number of independent members who must be on the governing board. This supports independent oversight within the governance framework of an insolvency professional agency.
Representation of Insolvency Professionals
Section 203(c) permits regulations specifying the number of insolvency professionals, being members of the agency, who may serve on its governing board. The provision therefore balances professional participation with the wider governance requirements prescribed by IBBI.
Section 203 at a Glance
| Clause | Regulatory Subject |
|---|---|
| (a) | Setting up the governing board of an insolvency professional agency. |
| (b) | Minimum number of independent members on the governing board. |
| (c) | Number of insolvency professionals who are members of the agency and may be on the governing board. |
Current IBBI Regulatory Framework
The principal regulatory framework is the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016. These regulations were made under Sections 196, 203 and 205 read with Section 240 of the Code.
IBBI notified the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Amendment) Regulations, 2026 on 13 May 2026. The current regulatory text should therefore be consulted when determining the applicable governance, appointment and other requirements of an insolvency professional agency.
Related IBC Provisions
Section 196: Powers and functions of IBBI, including regulatory powers concerning 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 204: Functions of insolvency professional agencies.
Section 205: Bye-laws of insolvency professional agencies.
Section 240: Power of the Board to make regulations.
Official Legal Resources
India Code - Central Acts and Legislation
IBBI - Insolvency and Bankruptcy Code and Amendment Acts