Experience During CS Management Training & Practice as a Sole Proprietor Do Not Qualify as Experience in Management under IP Regulations: IBBI denies IP Registration [Read Order]

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The Insolvency and Bankruptcy Board of India ( IBBI ) while considering an application seeking a certificate of registration as an Insolvency Professional (IP) held that the experience during CS Management Training and the practice as a sole proprietor do not qualify as experience in management as required under regulation 5(b) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016.

The applicant, a professional member of the ICSI Institute of Insolvency Professionals (ICSI IIP) had submitted an application under regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (IP Regulations) seeking a certificate of registration as an Insolvency Professional (IP). However, the IBBI came to the opinion that the applicant does not have 15 years of experience in management, as required under regulation 5(b) of the IP regulations and gave an opportunity to the applicant to explain why the application should be accepted.

The applicant claimed that he had experience in ‘practice’ since 1st April, 2013 and he counted thats period towards experience in management. He had stated: “…I am doing advisory and company law compliances including incorporation of Company, LLP, Annual and other incidental filings with RoC……. The works that I have done and experience that I have gain from 01/04/2013 onwards is qualify as a managerial experience…….”.

The Whole Time Member Dr. Navrang Saini wondered how the applicant could do company law compliances, when he was not professionally qualified. He noted that the applicant was merely uploading e-forms (after digital signature of Directors and certification from qualified professionals) under the Companies Act, 2013 on MCA 21 System. He opined that such work (uploading of E- forms and depositing fees on MCA 21 System) could not be considered experience in management.

Rejecting the application the Whole Time Member observed “I further observe that the applicant is not qualified to practice as a professional and does not have a single person to assist him in his work. His gross income is less than Rs.5 lakh in the last financial year. Therefore, I do not consider the experience during the period of practice from 1st April 2013 as experience in management. If the period of practice and the period of CS training is excluded, the applicant does not have 15 years of experience.”

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