Required to Preservation & maintain records (8 Years) by IP

Need to Keep and maintain records up to 8 YRs by Insolvency Professionals

IBBI issued a circular No.: IBBI/CIRP/38/2021 dated 06 January 2021, i.e “Preservation of records relating to the Corporate Insolvency Resolution Process (CIRP) by the Insolvency Professional.” in the exercise of its powers U/s 196(1)(g)(aa) of the IBC Code, read in along with Regulation 39A of the CIRP Regulations.

(The prior Circular was issued in this regard though the Circular No. IBBI/CIRP/37/2021 of 4^th Jan 2021)

• This Circular has been issued to:
  • Every Registered IPs
  • Every Recognized IPE
  • Every Registered IPA

(By address to authorized email accounts and to the IBBI website)

An Insolvency Professional (IP) is required to keep a number of records relating to the assignments carried out by him under the Insolvency and Bankruptcy Code, 2016 (Code) read in the Regulatory Requirements.

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Applicable regulatory provisions:

1. Regulation 7(2) of the IBBI (Insolvency Professionals) Regulation, 2016:

The registration provided to the Insolvency Professionals shall be subject to the condition that it keeps records of all assignments undertaken by it under the Code for at least 3 years from the date of finalization of such assignment.

2. Clause 19 of the Code of Conduct annexed to the First Schedule of the IP (Regulations)

This obligation provides the Insolvency Professionals to provide all documentation as may be needed by the Board or the insolvency professional agency (IPA) with which it is enrolled.

3. Authority to IBBI (the Board) to conduct an inspection of records, etc.

Regulation 3(4)(a) of the IBBI Regulation (Inspection and Investigation) 2017 (Inspection Regulations) provides that the IBBI may carry out an inspection, inter alia, to ensure that the records are maintained by the Insolvency Professionals in the manner required by the applicable legislation. Regulation 4(2) and Regulation 8(2) of the Inspection Regulations enable the Inspecting Authority/Inspecting Authority to guide the Insolvency Professionals to submit records as may be considered necessary.

4. Manner in which records can be managed to keep:

Regulation 39A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (Corporate Insolvency Resolution Process Regulations) mandate the Interim Resolution Professional (IRP) and the Resolution Professional (RP) to continue to maintain both a physical and an electronic version of the Corporate Insolvency Resolution Process records of the Corporate Debtor (CD) as per the record retention schedule as provided by the IBBI after proper communications with IPAs.

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5. IBBI directs the retention of records in accordance with Regulation 39A of the CIRP Regulations as given below:

(i) IP shall be maintained (time and manner of record-keeping)-

(a) an electronic copy of all records (physical and electronic) for the least period of 8 years; and (+)

(b) a physical copy of the records for the least period of 3 years, from the completion date of the Corporate Insolvency Resolution Process or the assertion of any proceeding pertaining to the CIRP, before the Board, the Adjudicating Authority (AA), the Appellate Authority or any Court, whichever is later.

(ii)  Period for which the records are to be retained and preserved:

The IP shall keep documents related to that period of time of the Corporate Insolvency Resolution Process when it has acted as an IRP or RP, regardless of the fact that it has not taken up the assignment from the outset or continues to do so.

(iii) An Insolvency Professional must retain copies of records relating to or forming the basis of:

• The documents of Public announcement.
• All the documents related to the constitution of CoC and CoC meetings;
• Related documents his appointment as IRP or RP, including the terms of appointment.
• documents related to handing over / taking over by him;
• any information memorandum.
• all the applications for fraudulent trading or avoidance transactions and
• documents of complete all filings with the Adjudicating Authority, Appellate Authority, and their orders.
• all the documents of invitation, consideration and approval of resolution plan;
• Copy of admission of Corporate Debtor into Corporate Insolvency Resolution Process.
• All the documents of claims, verification of claims, and list of creditors.
• complete statutory filings with IBBI and IPA;
• all the correspondence during the Corporate Insolvency Resolution Process;
• invoices copy and insolvency resolution process cost.
• copy of engagement of professionals, registered valuers, and insolvency professional entity, including work done, reports etc., submitted by them;
• other relevant records, which is needed to give a finalization account of the Corporate Insolvency Resolution Process.

(iv) Place & Authorization for Documents Preservation:

Insolvency Resolution shall maintain records in a safe place and make sure that unauthorized persons do not have entry to them.

For example, copies of records may be stored in digital form with the Information Utility. Despite the apparent location and ways of storage, the IP obligated to produce the documents as may be required by the Code and the Regulations.

Link of the Circular: Download Guidelines

More read:

IBC Forms Insolvency and Bankruptcy Code 2016 Forms Demand Notices Returns