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Introduction
In legal terms, Insolvency is a situation where the liabilities of a person or an organization exceed its assets. Insolvency is when an individual or organization, can no longer meet its financial obligation with its creditors or lenders become due. The situation may arise due to poor management, an increase in cash expenses, or a decrease in cash flow. In short, we can say that when the value of total liabilities exceeds total assets. The companies, limited liability partnerships, partnership firms, and individuals all are governed by the Bankruptcy Code for resolution of insolvency. The Code contains adjudicators, regulators, Insolvency professionals, and information utilities.
Because of the enforcement of the Insolvency Bankruptcy Code 2016, the insolvency professionals are the backbone of the corporate, partnership firms, lips, and Individuals.
An individual shall be eligible for registration if he satisfies the following condition:
The persons who are eligible to register as Insolvency Professional have to make an application to the Board in FORM A of the second schedule. The fees of Rs. 10,000/- has to be paid which is not refundable. Within a period of 7 days, the Board has to acknowledge the application. The Board may ask for additional documents for clarification. Once the Board is satisfied after inspection of documents may grant a certificate of Practice of Insolvency Professional in FORM B of the second schedule within 60 days of receipt of application.
A Firm or a Limited Liability Partnership or a Company may practice as an Insolvency Professional entity when the majority of partners of the firm or LLP or company are registered as Insolvency Professional or where the majority of the Directors of the company are registered as Insolvency Professional. The person who is eligible may make an application for recognition as an Insolvency Professional entity to the Board in FORM C.
Also, Read: Insolvency and Bankruptcy Code: Simplified Version.
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