Insolvency Professional Entities

Big cases are never handled by one person with a laptop. A large company’s resolution needs accountants, lawyers, valuers and a team that can work across cities. Most professionals therefore work through a firm, a limited liability partnership or a company. The Insolvency and Bankruptcy Code, however, speaks only about individuals who are enrolled and registered. Where does the firm fit, and what happens to the rules on independence when a professional’s partners and directors have their own client lists?

In two minutes

The Code itself regulates individuals (s.3(19), ss.206 to 208); the insolvency professional entity is a creature of the IBBI’s regulations, recognised by the Board so that firms and companies of professionals can be identified, held to independence standards and restrained when they misbehave.

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