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TMI BlogTEMPORARY SURRENDER AND REVIVAL OF PROFESSIONAL MEMBERSHIP OF INSOLVENCY PROFESSIONALX X X X Extracts X X X X X X X X Extracts X X X X ..... TEMPORARY SURRENDER AND REVIVAL OF PROFESSIONAL MEMBERSHIP OF INSOLVENCY PROFESSIONAL - By: - Mr. M. GOVINDARAJAN - Corporate Laws / IBC / SEBI - Dated:- 28-4-2022 - - Insolvency Professional Insolvency Professionals play a vital role in the corporate insolvency resolution process. Regulation 4 of Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 provides the eligibility criteria for a person to become insolvency professional. Regulation 5 provides the qualification and experience of a person to become insolvency professional. The eligible person has to appear insolvency examination as stipulated by the Insolvency and Bankruptcy Board of India ( Board for short). After passing the examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation he is to register with the Insolvency Professional Agency as a professional member. Then he has to undergo pre-registration Educational Course conducted by the Insolvency Professional Agency. After that he has to apply to the Board along with a non refundable fee of ₹ 10,000/-. Certificate of registration Regulation 7 provides the procedure for getting certificate of registration by the person from the Board. If the Board is satisfied, after such inspection or inquiry as it deems necessary that the applicant is eligible under these Regulations, it may grant a certificate of registration to the applicant to carry on the activities of insolvency professional. The certificate of registration granted by the Board ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the insolvency professional is subject to conditions as stipulated in Regulation 7(2). Authorization for assignment Regulation 7A (introduced vide Notification No. IBBI/2019-20/GN/REG045, dated 23.07.2019 ) provides that insolvency professional shall not accept or undertake an assignment after 31st December, 2019 unless he holds a valid authorization for assignment on the date of such acceptance or commencement of such assignment, as the case may be. Temporary surrender Regulation 10 provides the temporary surrender of registration certificate by the insolvency professional. Regulation 10(1) provides that insolvency professional agency shall inform the Board if any of its professional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members has temporarily surrendered his certificate of membership or revived his certificate of membership after temporary surrender, not later than seven days from approval of the application for temporary surrender or revival, as the case may be. This regulation 10(1) has been substituted by a new regulation vide Notification No. IBBI/2019-20/GN/REG045, dated 23.07.2019. The insolvency professional shall apply to Insolvency Professional Agency for his temporary surrender of Authorization for assignment. The insolvency professional agency shall inform the Board when it accepts the surrender of an authorization for assignment, within one working day of taking such action. Who can apply? Clause 26 to the Schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Insolvency and Bankruptcy Board of India (Model Bye-laws governing Board of the Insolvency Professional Agencies) Regulations 2016 provides that a professional member shall make an application to surrender his authorization for assignment to the Agency at least thirty days before he- becomes a person resident outside India; takes up an employment; or starts any business, except as specifically permitted under the Code of Conduct, and upon acceptance of such surrender, the same shall be intimated to the Board by the Agency within one working day of acceptance of surrender. Non acceptance No application for surrender of authorization for assignments shall be accepted by the Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ency, if the authorization for assignment has been suspended; an assignment is continuing; or name of the professional member is included in any panel prepared by the Board for undertaking assignment. Acceptance Clause 27 provides that a professional member who wishes to surrender his membership of the Agency may do so by submitting an application for surrender of his membership. Upon acceptance of such surrender of his membership, and completion of thirty days from the date of such acceptance, the name of the professional member shall be struck from the registers of the Agency, and the same shall be intimated to the Board. Any fee that is due to the Agency from a professional member surrend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ering his membership shall be cleared prior to his name being struck from the registers of the Agency. Refusal to accept The Agency may refuse to accept the surrender of membership by any professional member if there is any grievance or disciplinary proceeding pending against the professional member before the Agency or the Board; or the professional member has been appointed as a resolution professional, liquidator or bankruptcy trustee for a process under the Code, and the appointment of another insolvency professional may be detrimental to such process. Inconveniences due to temporary surrender Circular No. IBBI/IP/021/19, dated 02.05.2019 prescribes the procedures for the surren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of professional membership. Temporary surrender of professional membership creates inconveniences where the insolvency professional is- conducting a process - corporate insolvency resolution, corporate liquidation, individual insolvency resolution and individual bankruptcy - under the Code; is acting as an authorized representative representing any class of financial creditors; is included in the panel under Insolvency Professionals to act as Interim Resolution Professionals or Liquidators (Recommendation) Guidelines, 2018 or similar Guidelines, is included in the panel under the Guidelines for Appointment of Insolvency Professionals as Administrators under the Securities and Exchange Board of India (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppointment of Administrator and Procedure for Refunding to the Investors) Regulations, 2018 or similar Guidelines; or is acting as an Administrator under the Guidelines for Appointment of Insolvency Professionals as Administrators the Securities and Exchange Board of India (Appointment of Administrator and Procedure for Refunding to the Investors) Regulations, 2018 or similar Guidelines. Procedure The Circular advised that advised that the Insolvency Professional Agency shall not ordinarily accept temporary surrender of professional membership of insolvency professional. The following forms may be used to process acceptance of temporary surrender and revival of professional membership of insolvency profession ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al- Form A: Application by insolvency professional to Insolvency Professional Agency for temporary surrender; Form B: Intimation to the Board on acceptance of temporary surrender by the Insolvency Professional Agency Form C: Letter of acceptance of temporary surrender by the Insolvency Professional Agency to insolvency professional ; Form D: Application by an insolvency professional for revival of his professional membership; Form E: Intimation to the Board on revival of professional membership by the Insolvency Professional Agency ; and Form F: Letter of revival of professional membership by the Insolvency Professional Agency to insolvency professional. Clarification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vide circular No. IBBI/IP/2022, dated 11.04.2022 , the Board clarified that i n view of the provisions relating to 'temporary surrender of professional membership' contained in clause 26 of the Schedule to the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 , have been substituted vide Notification No. IBBI/2019- 20/GN/REG043, dated 23.07.2019 (w.e.f. 23-07-2019) and in pursuant to the introduction of provision of Authorization for Assignment , it is clarified that the process of Temporary Surrender of Professional Membership, ceases to exist with issuance of above mentioned notification. As such a insolvency professional cannot surrender his membership temporarily. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... 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