Insolvency professionals are permitted to take assistance of legal, accounts or other professionals but not supposed to outsource any of his duties or responsibilities under Insolvency and Bankruptcy Code, 2016 and regul

Insolvency and Bankruptcy Board of India (IBBI) came out with a circular in January 2018 clarifying that an Insolvency Professional (IP) is required to perform certain tasks under the Code while acting as an Interim Resolution Professional, a Resolution Professional, a Liquidator or a Bankruptcy Trustee for various processes. They shall not outsource any of his duties and responsibilities under the Insolvency and Bankruptcy Code. They shall not require any certificate from another person certifying eligibility of resolution application. Further this was also stated that the insolvency professional shall exercise reasonable care and diligence and take all necessary steps to ensure that the corporate person undergoing any process under the Code complies with the applicable laws. The Insolvency and Bankruptcy Code read with Insolvency Professional Regulations allow insolvency professional to appoint accountants, legal or other professionals, as may be necessary. IBBI noticed that certain IP are seeking from prospective resolution applicants to submit a certificate of their eligibility. This amounts to outsourcing responsibilities of insolvency professional to another person. The code read with regulation does not require such certification from a third person. IBBI accordingly prohibited IP from outsourcing otherwise than in the Code and desist from asking for certificate of eligibility of Resolution applicants.