checklist of compliance requirements for RPs under IBC

Comprehensive checklist of compliance requirements for Resolution Professionals

Comprehensive checklist of compliance requirements for Insolvency Professionals acting as Resolution Professionals (RPs) under the Insolvency and Bankruptcy Code 2016. Here’s a structured summary of its contents:

Comprehensive guide for Insolvency Professionals acting as Resolution Professionals under the Insolvency and Bankruptcy Code (IBC), 2016. Here’s a structured summary of its key insights:

Statutory Role & Appointment : Defined under Section 5(27) of IBC. Powers include managing the corporate debtor, verifying claims, forming CoC, inviting resolution plans, and filing avoidance applications.

Compliance & Ethical Obligations : RPs are considered public servants under the Prevention of Corruption Act, as per Jharkhand HC. Must adhere to IBBI’s Code of Conduct: independence, confidentiality, integrity, and transparency. Subject to disciplinary action for misconduct.

Duties Related to Claims : IP Must verify, collate, and update claims. IP Include statutory liabilities even if not formally filed. IP Failure to include can lead to extinguishment under Section 31(1).

Asset Inclusion & Priority Issues : Assets not legally owned by the CD must not be included Inter-se priority among secured creditors is not mandatory but should be respected.

Standard Operating Procedure (SoP) for RPs Includes: Appointment & public announcement, Claim verification, CoC constitution, Valuation, IM preparation, RFRP issuance, Resolution plan evaluation, Filing with NCLT, Post-CIRP obligations

Information Memorandum Checklist must include Assets & liabilities, Financials, Defaults & guarantees, Related party transactions, Avoidance transactions, Litigations, Regulatory approvals, MSME status, Real estate project details

Resolution Plan Requirements must address Value maximization, Stakeholder treatment, Avoidance transaction proceeds, Feasibility & viability, Performance security, Legal approvals, Monitoring mechanism

Real Estate Insolvency (Post-2025 Amendments) : Project-wise resolution mandated. Separate books, bank accounts, and CoC representation for each project. Enhanced role in coordinating with RERA and local authorities.

Judicial Precedents :

• Essar Steel: RP is not an adjudicator; IP must ensure compliance.
• Jaypee Kensington: RP must engage with all stakeholders.
• Bhushan Power & Steel: RP must verify Section 29A eligibility and file avoidance applications.
• Saranga Aggarwal v. Bhavesh Sheth (2025 INSC 314): Regulatory penalties not covered under moratorium.

Compliance & Responsibility Framework for Resolution Professionals

Key Compliance Categories for Insolvency Professionals acting as Resolution Professionals

1. Before Commencement of Work

• Authorization for Assignment (Regulation 7A)
• Submission of Form IP-1 (within 3 days of consent)
• Statutory Basis & Appointment

• • Section 5(27) IBC → RP = insolvency professional appointed to conduct CIRP (includes IRP).
  • Key powers/duties under IBC:
    • Management/control of CD (Sec. 17, 20).
    • Custodian of assets (Sec. 18).
    • Constitute CoC, convene meetings (Sec. 21–24).
    • Invite/evaluate Resolution Plans (Sec. 25(2)(h), Sec. 30).
    • File avoidance applications (Secs. 43–51, 66).

2. During RP’s Stage

• • Appointment by CoC and AA
  • Maintenance of creditor list
  • Appointment of registered valuers
  • Disclosure of relationships with professionals
  • Submission of Information Memorandum (IM)
  • Filing of CIRP forms (CIRP-3, CIRP-4, CIRP-6, CIRP-7, CIRP-8)
  • Determination and filing of PUFE transactions
  • Submission of CoC-approved resolution plan
  • Regulatory Duties (CIRP Regulations)

• • • Custody & control of assets/records with witnesses (Reg. 3A).
    • Access to books, registries, creditors’ data (Reg. 4).
    • Submission of Information Memorandum (Reg. 36).
    • Monitoring Committee involvement post-plan approval (Reg. 38, Feb 2025 amendment).
    • Filing of reports, CIRP forms, disclosures with IBBI/IPA.

3. Compliance & Ethical Obligations

• Must comply with Code of Conduct (IBBI IP Regulations, 2016).
• Maintain integrity, independence, confidentiality, objectivity.
• Conflict of Interest disclosures to IBBI/IPA/CoC (Reg. 3).
• Confidentiality of financial/commercial data.
• Time-bound adherence to CIRP steps (strict timelines).
• Filing of regular reports, IM, CoC minutes.
• Liable for disciplinary action, penalties, suspension, prosecution for misconduct.
• Recognized as “public servants” under PC Act (Jharkhand HC, 2025), hence public accountability applies.

4. Special Sectoral Responsibilities (Post–2025 Real Estate Amendments)

• Project-wise CIRP → ring-fence assets/liabilities per project.
• Separate books & bank accounts per project (Reg. 4D).
• Homebuyers = financial creditors with CoC participation.
• Invite resolution plans per project.
• Coordinate with RERA, local authorities.
• Handover possession of units to allottees (Reg. 4E).
• Submit reports on development rights (Reg. 30C).

5. Common Non-Compliance Issues (Judicial Observations)

• Failure to verify Section 29A eligibility of applicants.
• Non-filing of avoidance applications (Secs. 43–51).
• Inadequate engagement with operational creditors (esp. homebuyers).
• Poor documentation/record keeping.
• Delay in disclosures & filings.

3. General Compliances

• Membership and professional fees
• Annual and half-yearly returns
• Self-declaration forms
• Record maintenance (3 to 8 years)
• Conflict of interest and relationship disclosures
• Restrictions on employment and appointments
• Confidentiality and use of registration details
• MCA-21 filings (e.g., INC-28, SH-8, SH-9, MGT-7)
• CPE credit hours (10 per year, 60 in 3 years)

Important Forms & Deadlines

• • Form AA: Before accepting assignment
  • Form CIRP-3 to CIRP-8: Various stages of CIRP
  • Form G: Expression of Interest
  • Form H: Compliance certificate with resolution plan
  • Form E: Professional fee disclosure
  • Annual Self Declaration: By 15th April each year

Submission Platforms

• • IBBI Portal: Most CIRP-related forms
  • IPA Portal: Relationship disclosures, cost disclosures
  • ICSI IIP Portal: Membership, half-yearly returns
  • MCA-21 Portal: Company filings during CIRP

Updated CIRP Compliance Tracker (2025)

• • Forms CP-1 to CP-5 replace older forms.
  • Monthly reporting cycle introduced.
  • Transition provisions for ongoing and closed CIRPs.

IBC, CIRP Regulations Guidance on SoP for Resolution Professionals

Stage 1: Appointment & Commencement : Ensure valid appointment as IRP through NCLT admission order. CIRP commences from Insolvency Commencement Date (ICD). Reference: Sec. 16 IBC

Stage 2: Public Announcement : Issue Form A within 3 days of appointment. Publish in English & regional newspapers; upload on IBBI/CD website. Specify last date for claim submission. Reference: Sec. 15 IBC, Reg. 6 CIRP Regs

Stage 3: Collection & Verification of Claims : Receive claims in Forms B–F (financial, operational, employees, workmen, statutory). Verify claims within 7 days of receipt. Collate & prepare updated list of creditors. Reference: Sec. 18(b), 25(2)(e), Reg. 13

Stage 4: Constitution of CoC : Constitute CoC within 7 days from last claim date. Classify creditors: Financial Creditors (FCs) vs. Operational Creditors (OCs). Reference: Sec. 21 IBC, Reg. 17

Stage 5: Valuation Exercise : Appoint two registered valuers (Reg. 27). Determine fair value & liquidation value. Basis for assessing plan feasibility. Reference: Reg. 35 CIRP

Stage 6: Management as Going Concern : Take control & preserve assets. Manage operations of CD as a going concern. Obtain CoC approval for interim finance (Sec. 28). Reference: Sec. 20, 25(2)(c), Sec. 28 IBC

Stage 7: Avoidance Transactions : Identify, investigate and file avoidance applications:

• • Preferential (Sec. 43)
  • Undervalued (Sec. 45)
  • Fraudulent (Sec. 66)
  • Extortionate (Sec. 50),
  • Form CIRP-8 to be filed with IBBI. Reference: Sec. 25(2)(j), Reg. 35A

Stage 8: First CoC Meeting & Appointment of RP : Convene first meeting within 7 days of CoC constitution. CoC may confirm IRP as RP or replace. Reference: Sec. 22, Reg. 17(1)

Stage 9: Withdrawal under Sec. 12A : If applicant seeks withdrawal → CoC may approve with 90% voting. File Form FA with NCLT. Reference: Sec. 12A, Reg. 30A

Stage 10: Information Memorandum (IM) : Prepare IM with: assets, liabilities, litigation, guarantees, etc. Share with CoC and eligible RAs after confidentiality undertaking. Reference: Sec. 25(2)(g), Reg. 36(2)

Stage 11: Invitation for Resolution Plans : Publish Form G (EoI) in 2 newspapers & upload. Issue RFRP & Evaluation Matrix in consultation with CoC. Ensure compliance with Sec. 29A eligibility. Reference: Reg. 36A–36B

Stage 12: Receipt & Vetting of Resolution Plans : Vet plans against Sec. 30(2) requirements like Eligibility (29A), Payment to OCs (minimum liquidation value), Feasibility & viability, Reject late or non-compliant plans.Reference: Sec. 30(2), Reg. 39

Stage 13: Compliance Certificate to CoC : Submit Form H with compliant resolution plans. Certify adherence to IBC, CIRP Regs, Sec. 29A. Reference: Reg. 39(4)

Stage 14: CoC Voting : Place all compliant plans before CoC. Approval requires 66% voting share. RP cannot “choose” among plans. Reference: Sec. 30(4), Reg. 39(3)

Stage 15: Filing before NCLT : File CoC-approved plan under Sec. 30(6). If no plan approved then file for liquidation (Sec. 33). Reference: Sec. 30(6), 33 IBC

Stage 16: Post-CIRP Obligations : Assist in plan implementation or liquidation. Explore compromise/arrangement under Sec. 230, Companies Act.Reference: Sec. 23, Reg. 39C.

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