Insolvency Professionals (IP), Eligibility Criteria for Registration as an IP, Insolvency Professional Examinations, Preparation Tips and Information about a New Book to Aid and Assist in Preparation
About the Author
Pranav Khatavkar is a Mumbai based Advocate who penned India’s first commentary on the Insolvency and Bankruptcy Code, 2016. In continuation of his mission of developing India’s re-written bankruptcy framework, Pranav has recently penned a book titled Guide to Insolvency Professional Examination that aids and assists candidates to appear for the insolvency professional examination. He can be reached at [email protected].
The Insolvency and Bankruptcy Code, 2016 (“Code”) has been introduced with the primary objective of increasing lender’s confidence and facilitating the expansion of the credit market in India. As has been stated in the objects clause, the objective of this new law is to promote entrepreneurship, availability of credit, and balance the interests of all stakeholders by consolidating and amending the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner and for maximization of value of assets of such persons and matters connected therewith or incidental thereto.
Who are insolvency professionals?
Insolvency Professionals (IP’s) are those licensed professionals that are authorised by Insolvency Professional Agencies (IPA’s) which take up the roles of Interim Resolution Professional/ Resolution Professional/Liquidator/Bankruptcy Trustee in the insolvency resolution and liquidation/bankruptcy process of different entities (as the case may be) as have been envisaged under the Code. Insolvency Professional Agencies (IPA’s) are those specialized bodies that are statutorily authorised to execute the task of registration and governance of Insolvency Professionals.
Eligibility criteria for registration as an IP
The criteria for registration of an IP are enlisted under the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“Regulations”).
In order to be eligible for registration as an Insolvency Professional, a Professional has to fulfil the following criteria:-
- Register with an IPA.
- Appear for and clear the Limited Insolvency Examination (“LIE”) or the National Insolvency Examination (“NIE”).
- Have a work experience of fifteen years as a management professional after having received a bachelor’s degree from a university established or recognized by law.
- Have a work experience of ten years post enrollment as a Chartered Accountant/Company Secretary/Cost Accountant/Advocate.
Further, the Ministry of Corporate Affairs vide press release dated 23rd November 2016, stated that the following categories of individuals are eligible for registration as Insolvency Professionals:-
- Advocates, Chartered Accountants, Company Secretaries and Cost Accountants with 10 years’ of post-membership experience (practice or employment) or a Graduate with 15 years’ of post-qualification managerial experience, on passing the Limited Insolvency Examination.
- Any other individual on passing the National Insolvency Examination
At the outset, it can be deduced that a work experience requirement has been specified for applicants appearing for the LIE and not for applicants appearing for the NIE.
The Regulations mandate two qualifying examinations for insolvency professionals i.e. Limited Insolvency Examination and National Insolvency Examination.
On 30th November 2016, the Insolvency and Bankruptcy Board of India (“Board”) notified the syllabus for the LIE.
As far as the NIE is concerned, the examination hasn’t been notified as of date. However, as per the press release made by the Ministry of Corporate Affairs on 23rd November 2016, the details of the NIE will be specified through regulations.
Since only the LIE has been notified as of date, I will give tips and techniques for preparation for the LIE only (on the basis of the syllabus and other information pertaining to LIE available in the public domain). A candidate appearing for the LIE should apply the following tips:-
- Obtain complete clarity regarding the prescribed syllabus and formulate a specific plan of study.
- Practice as many questions as possible.
- Solve the sample paper released by the Board in a time bound manner.
- Keep reading and re-reading the bare acts of the law subjects that have been covered under the syllabus. Make notes if necessary.
- In the notified syllabus for the LIE, maximum weightage (30%) has been given to the Code followed by the Rules and Regulations framed under the Code (25%). So ensure that you are very thorough with the Code as well as the Rules and Regulations.
- While attempting to solve the sample paper released by the Board, try to grasp and understand the pattern of the questions.
Book on Insolvency Professional Examination- Features and Tips for Using the Book
I am informing you with great pleasure that I have penned a book that aids and assists candidates to prepare for the limited insolvency examination. Some of the key features and highlights of this book are as under:-
- About 1000 questions on all components of the syllabus in accordance with the prescribed format.
- All instructions issued by the Insolvency and Bankruptcy Board of India in relation to the insolvency professional examination have been reproduced in the book.
- The book contains a ready reckoner summarizing all timelines and compliances under the Code and the Rules and Regulations framed thereunder.
- Model question paper for Limited Insolvency Examination released by the Insolvency and Bankruptcy Board of India has been included.
- Law applicable to insolvency professionals has been reproduced.
As mentioned earlier, one should first master the syllabus and do a thorough analysis of the model question for limited insolvency examination that has been released by the Board.
The next step should be to procure and carefully study the bare acts of the subjects that have been prescribed in the syllabus. I recommend studying primarily from the bare act as the questions in the exam are fairly straightforward and not too technical.
After mastering the relevant bare acts or reading it at least two to three times, an applicant should proceed to the next step i.e. solving questions. That is where my book will help. I can say this with fair amount of confidence that if a candidate who is appearing for the insolvency professional examination refers to my book, he will be quite well equipped to attempt the exam.
Another way of going about using the book is may be to first attempt a few questions from each chapter in the book and get a fair idea about the type of questions that may be asked and then proceed to study from the bare act.
Either way, the objective is to ensure that a candidate is well versed with the syllabus and the kind of questions that may come in the exam.