{"id":8691,"date":"2025-03-01T09:39:46","date_gmt":"2025-03-01T09:39:46","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8691"},"modified":"2025-06-30T09:29:04","modified_gmt":"2025-06-30T09:29:04","slug":"afa-under-ibc","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/","title":{"rendered":"Overview on Mandatory Requirement of AFA under IBC Code"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4417\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2022\/05\/NCLT-under-the-IBC-Act.jpg\" alt=\"NCLT under the IBC Act\" width=\"895\" height=\"501\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dd120d6762d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dd120d6762d\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Overview_on_Mandatory_Requirement_of_AFA_under_IBC_Code\" title=\"Overview on Mandatory Requirement of AFA under IBC Code \">Overview on Mandatory Requirement of AFA under IBC Code <\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Eligibility_for_Authorisation_for_Assignment\" title=\"Eligibility for Authorisation for Assignment : \">Eligibility for Authorisation for Assignment : <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Ineligibility_to_Undertake_an_Assignment\" title=\"Ineligibility to Undertake an Assignment\">Ineligibility to Undertake an Assignment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Suspension_of_AFA\" title=\"Suspension of AFA: \">Suspension of AFA: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Dos_and_Donts_for_Insolvency_Professionals\" title=\"Do\u2019s and Don\u2019ts for Insolvency Professionals\">Do\u2019s and Don\u2019ts for Insolvency Professionals<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/afa-under-ibc\/#Our_Assistance_During_Insolvency_Proceedings\" title=\"Our Assistance During Insolvency Proceedings\">Our Assistance During Insolvency Proceedings<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Overview_on_Mandatory_Requirement_of_AFA_under_IBC_Code\"><\/span><span style=\"color: #000080;\"><strong>Overview on Mandatory Requirement<\/strong> of <strong>AFA under IBC Code <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>This document provides an overview of the Authorisation for Assignment under the IBBI (Insolvency Professionals) Regulations, outlining its meaning, eligibility criteria, procedural aspects, and key do\u2019s and don\u2019ts for Insolvency Professionals. The AFA is a crucial requirement for insolvency professionals under the Insolvency and Bankruptcy Code, 2016. An IP cannot accept assignments as an Interim Resolution Professional, Resolution Professional, Liquidator, Bankruptcy Trustee, or any other role under the IBC unless they hold a valid AFA issued by their respective Insolvency Professional Agency. <strong>\u00a0<\/strong>As per Regulation 2(aa) of the IBBI Regulations, AFA is an authorization issued by an Insolvency Professional Agency to its professional members to undertake assignments under the Insolvency and Bankruptcy Code, 2016. Below is a structured summary version of the key points:<\/p>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Eligibility_for_Authorisation_for_Assignment\"><\/span><span style=\"color: #000080;\"><strong>Eligibility for Authorisation for Assignment <\/strong>: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>As per Clause 12A(2) of the Model Bye-laws, an insolvency professional is eligible for an AFA if they:\n<ul>\n<li>Are registered with IBBI as an insolvency professional.<\/li>\n<li>IP is a fit and proper person as per Regulation 4(g) of IBBI (IP) Regulations.<\/li>\n<li>Are not in employment.<\/li>\n<li>IP is not debarred by the IPA or IBBI.<\/li>\n<li>Are below 70 years of age.<\/li>\n<li>Have no pending disciplinary proceedings.<\/li>\n<li>Have complied with all regulatory requirements, including:\n<ul>\n<li>Payment of fees to IPA and IBBI.<\/li>\n<li>Necessary filings and disclosures.<\/li>\n<li>Continuous professional education.<\/li>\n<li>Any other compliance requirements under IBC and related regulations.<\/li>\n<\/ul>\n<\/li>\n<li>The application must be submitted to the IPA in the prescribed form along with the required fee. The IPA has 90 days to process and either approve or reject the application. The IP must comply with all conditions set out in the applicable regulations before applying.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Ineligibility_to_Undertake_an_Assignment\"><\/span><span style=\"color: #000080;\"><strong>Ineligibility to Undertake an Assignment<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ol>\n<li><span style=\"color: #000080;\"><strong>Regulation 7A<\/strong>:<\/span> Since January 1, 2020, an IP cannot accept assignments without a valid AFA. Exception: If an assignment was already undertaken on December 31, 2019 or when an AFA was valid at that time.<\/li>\n<li><span style=\"color: #000080;\"><strong>IBC Regulation 23<\/strong>:<\/span> An IP cannot be employed while holding or undertaking an assignment under Authorisation for Assignment. However, a professional can register as an IP while employed but must resign before obtaining an Authorisation for Assignment. An insolvency professional may surrender AFA to take up employment.<\/li>\n<\/ol>\n<\/li>\n<li><span style=\"color: #000080;\"><strong>Procedure for Issuing AFA : <\/strong><\/span>The IPA will approve or reject the AFA application in Form B. If the IPA does not act within 15 days of receipt, the AFA will be deemed issued or renewed. AFA is valid for one year or until the insolvency professional turns 70, whichever comes first.<\/li>\n<li><span style=\"color: #000080;\"><strong>Application for Issue or Renewal of AFA: <\/strong><\/span>Application is to be made to the IPA in the prescribed form and with the required fee. Renewal applications:\n<ul>\n<li>Must be filed before expiry of the existing AFA.<\/li>\n<li>Cannot be submitted earlier than 45 days before expiry.<\/li>\n<\/ul>\n<\/li>\n<li><span style=\"color: #000080;\"><strong>Employment Restrictions<\/strong>:<\/span> An individual can register as an insolvency professional while still being employed. However, to obtain and hold an AFA, the individual must discontinue employment. If an insolvency professional wishes to take up employment, they may surrender their Authorisation for Assignment.<\/li>\n<li><strong><span style=\"color: #000080;\">Appeal Against Rejection of Authorisation for Assignment<\/span> : <\/strong>If AFA is rejected, the applicant may appeal to the Membership Committee within 7 days. The Membership Committee will decide the appeal within 15 days.<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Suspension_of_AFA\"><\/span><span style=\"color: #000080;\"><strong>Suspension of AFA<\/strong>: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>If disciplinary proceedings are initiated against an IP by the IPA or the Insolvency and Bankruptcy Board of India (IBBI), their AFA shall be automatically suspended. An insolvency professional must apply for surrender of Authorisation for Assignment at least 30 days in advance if they:<\/li>\n<\/ul>\n<ol>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Become a resident outside India.<\/li>\n<li>Take up employment.<\/li>\n<li>Start a business (unless permitted under the Code of Conduct).<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<ul>\n<li>The IPA must inform IBBI within one working day of accepting the surrender. Surrender will not be accepted if:<\/li>\n<\/ul>\n<ol>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Authorisation for Assignment is suspended.<\/li>\n<li>The insolvency professional is handling an ongoing assignment.<\/li>\n<li>Insolvency professional\u2019s name is included in an IBBI panel for assignments.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<ul>\n<li>\n<h3><span class=\"ez-toc-section\" id=\"Dos_and_Donts_for_Insolvency_Professionals\"><\/span><span style=\"color: #000080;\"><strong>Do\u2019s and Don\u2019ts for Insolvency Professionals<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #000080;\">\u2705 <strong>Do\u2019s:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>An IP must not accept an assignment (e.g., CIRP as IRP\/RP\/Liquidator) unless they hold a valid AFA at the time of acceptance.<\/li>\n<li>IP must mention their AFA number &amp; validity in all communications.<\/li>\n<li>An IP must surrender their AFA before taking up any employment.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p style=\"padding-left: 40px;\"><span style=\"color: #ff0000;\">\ud83d\udeab <strong>Don\u2019ts:<\/strong><\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>IP cannot accept new assignments without a valid AFA.<\/li>\n<li>An IP cannot be employed while holding an AFA or undertaking an assignment.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li><span style=\"color: #000080;\"><strong>Relevant Legal Provisions<\/strong><\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Regulation 7A of IBBI (IP) Regulations \u2013 Restricts assignment acceptance without a valid AFA.<\/li>\n<li>Regulation 12A of Model Bye-Laws &amp; GB of IPA Regulations \u2013 Governs issuance and renewal of AFA.<\/li>\n<li>Regulation 23A of Model Bye-Laws of an IPA \u2013 Restricts employment while holding an AFA.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3 data-start=\"122\" data-end=\"170\"><span class=\"ez-toc-section\" id=\"Our_Assistance_During_Insolvency_Proceedings\"><\/span><span style=\"color: #000080;\"><strong data-start=\"122\" data-end=\"170\">Our Assistance During Insolvency Proceedings<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"172\" data-end=\"329\">We offer end-to-end legal and strategic support during insolvency and bankruptcy proceedings under the Insolvency and Bankruptcy Code, 2016 (IBC), including Drafting and Filing of Resolution Plans under Section 30 of the IBC, tailored to meet statutory compliance and commercial viability. Preparation and Filing of Liquidation Applications under Section 33, along with associated rules and procedures. &amp; Filing of Ancillary Applications and Documents before the Adjudicating Authority (NCLT), including:<\/p>\n<ul data-start=\"331\" data-end=\"1413\">\n<li data-start=\"593\" data-end=\"1007\">\n<ul data-start=\"701\" data-end=\"1007\">\n<li data-start=\"701\" data-end=\"780\">\n<p data-start=\"703\" data-end=\"780\">Applications for appointment or replacement of Resolution Professionals (RPs)<\/p>\n<\/li>\n<li data-start=\"783\" data-end=\"935\">\n<p data-start=\"785\" data-end=\"935\">Applications under Sections 7 (Financial Creditors), 9 (Operational Creditors), 10 (Corporate Debtors), and 60 (Jurisdiction &amp; Transfer), among others<\/p>\n<\/li>\n<li data-start=\"938\" data-end=\"1007\">\n<p data-start=\"940\" data-end=\"1007\">Rejoinders, affidavits, written submissions, and compliance reports<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<li data-start=\"1009\" data-end=\"1256\">\n<p data-start=\"1011\" data-end=\"1112\">Comprehensive Legal Support to Resolution Professionals and the Committee of Creditors (CoC) for Drafting and vetting of legal documents, notices, and agreements &amp; Ensuring compliance with statutory timelines and reporting obligations<\/p>\n<\/li>\n<li data-start=\"1258\" data-end=\"1413\">\n<p data-start=\"1260\" data-end=\"1317\">Representation Before Adjudicatory Forums, including National Company Law Tribunal (NCLT) &amp; National Company Law Appellate Tribunal (NCLAT)<\/p>\n<\/li>\n<\/ul>\n<p data-start=\"1414\" data-end=\"1564\">We ensure a strategic, compliant, and timely approach to all stages of the Corporate Insolvency Resolution Process (CIRP) and liquidation proceedings.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Overview on Mandatory Requirement of AFA under IBC Code This document provides an overview of the Authorisation for Assignment under the IBBI (Insolvency Professionals) Regulations, outlining its meaning, eligibility criteria, procedural aspects, and key do\u2019s and don\u2019ts for Insolvency Professionals. The AFA is a crucial requirement for insolvency professionals under the Insolvency and Bankruptcy Code, &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[658],"tags":[1147],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8691"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8691"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8691\/revisions"}],"predecessor-version":[{"id":9235,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8691\/revisions\/9235"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8691"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8691"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8691"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}