The paper proposes minimum shareholding or capital contribution for directors or partners of Insolvency Professional Entities (IPEs) to enhance governance, accountability, and professional independence. IPEs, recognised under IBC and Insolvency Professionals Regulations, provide a structured framework for Insolvency Professionals (IPs) to operate collectively. Currently, the absence of minimum capital thresholds has led to disproportionate ownership, with a few members holding significant equity while many IPs bear substantial professional responsibilities with nominal stakes. The proposal suggests a minimum 5% capital contribution per director/partner, with pro-rata adjustments for IPEs having more than 20 members. The Feedback/ comments from stakeholders are invited.
