With an end goal to help faster resolution of cases and unlock value of assets, the Insolvency and Bankruptcy Code will get operational from tomorrow, Mamta Binani, President, ICSI, the apex body of company secretaries, informed today.
"The entire Insolvency and Bankruptcy Code will be functional from tomorrow," she said.
Both ICSI (Institute of Company Secretaries of India) and ICAI (Institute of Chartered Accountants of India) have registered not-for-profit companies under the Code to act as insolvency professional agencies.
The Insolvency and Bankruptcy Board of India (IBBI) has been set up under the Code that seeks to consolidate and amend laws relating to reorganisation as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.
With the Board for Industrial and Financial Reconstruction (BIFR) becoming redundant, corporate insolvencies will now be dealt by the National Company Law Tribunal and proprietorship and partnership insolvencies by the Debt Recovery Tribunal.
A firm registered under Section 8 of the Companies Act, 2013 -- having a minimum net worth of Rs 10 crore and a paid-up capital of Rs 5 crore -- will be eligible to be an insolvency professional agency.
According to Binani, a majority of the board members of the professional agency, including the chairman, should be independent directors.
"The board will soon appoint a chairman. In the next 20 days, we will have the first meeting of the agency," she said.
Among others, advocates, chartered accountants, company secretaries and cost accountants can serve as insolvency professionals with 15 years of experience in their respective fields.
"An insolvency professional agency is a frontline regulator for insolvency professionals. It enrols professional members, lays down standards of professional conduct for them and monitors their performance," Binani said.
On Monday, Finance and Corporate Affairs Minister Arun Jaitley said there are a lot of expectations from the new insolvency mechanism and expressed confidence that it would deliver the desired results in years to come.
(With inputs from PTI)