Authorisation for Assignment (AFA)
Registration makes you an IP. The AFA from your IPA lets you take a case. Here are its rules.
Registration with IBBI makes you an insolvency professional. It does not, by itself, let you take an assignment. Since 31 December 2019, regulation 7A of the IBBI (Insolvency Professionals) Regulations, 2016 has barred an IP from accepting or starting any assignment without a valid authorisation for assignment (AFA) on that date.
An "assignment" means acting as interim resolution professional, resolution professional, liquidator, bankruptcy trustee, authorised representative or in any other role under the Code. The AFA is issued not by IBBI but by the IP's own insolvency professional agency, under clause 12A of the model bye-laws.
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Who Is Eligible for an AFA (Clause 12A(2))
The professional member must, on the date of application:
- checkBe registered with IBBI as an insolvency professional
- checkBe a fit and proper person as explained in regulation 4(g) of the IP Regulations
- checkNot be in employment
- checkNot be debarred by any direction or order of the IPA or IBBI
- checkNot have attained the age of 70
- checkHave no disciplinary proceeding pending before the IPA or IBBI
- checkBe up to date on fees to the IPA and IBBI, filings and disclosures, continuous professional education and other requirements
Insolvency Professional Entities
The conditions on employment, age and continuous professional education do not apply to an insolvency professional entity registered as an IP. An IPE must instead allow only a partner or director who is an IP and holds a valid AFA to sign and act for it (regulation 7(2)(ha)).
Issue, Renewal and Appeal
- 1
1. Apply to your IPA
In the form, manner and with the fee the IPA sets. A renewal application may be made any time before expiry, but not earlier than 90 days before.
- 2
2. IPA decides
It issues or renews the AFA in Form B or rejects the application with a reasoned order, and informs IBBI when it issues or renews (regulation 10(1)).
- 3
3. Deemed issue after 90 days
If the IPA neither issues, renews nor rejects within 90 days of receiving the application, the AFA is deemed issued or renewed.
- 4
4. Appeal against rejection
To the IPA's Membership Committee within 15 days of receiving the order. The committee disposes of it by reasoned order within 15 days.
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Validity, Suspension and Surrender
| Event | Rule |
|---|---|
| Validity | One year from issue or renewal, but stretched to 30 June if the year ends between 1 January and 30 June, or to 31 December if it ends between 1 July and 31 December |
| Turning 70 | The AFA is valid only until the date the IP attains 70 |
| Disciplinary proceedings | The AFA stands suspended once the IPA or IBBI initiates disciplinary proceedings; they are pending from the show cause notice until disposal (clause 23A) |
| Surrender | Apply at least 30 days before becoming resident outside India, taking up employment or starting a business not permitted by the Code of Conduct (clause 26) |
| Surrender refused | If the AFA is suspended, an assignment is continuing, or the IP is on an IBBI panel for assignments |
| Expiry mid-assignment | Regulation 7A does not apply to an assignment the IP is already undertaking on the expiry date, so it continues |
Worked Example
An IP's AFA is renewed on 10 March 2026. One year would end on 9 March 2027, which falls between 1 January and 30 June, so the AFA runs to 30 June 2027. He can apply for renewal no earlier than 90 days before 30 June 2027, so from the start of April 2027. If he turns 70 on 15 May 2027, the AFA ends that day instead.
Suppose in February 2027 a financial creditor proposes him as IRP in a section 7 application. He must hold a valid AFA on the date he accepts the assignment, and the NCLT will reject an application if a disciplinary proceeding is pending against the proposed RP (section 7(5)). If he has been served a show cause notice, his AFA is also suspended under clause 23A, so he cannot accept.
How the Limited Insolvency Examination Tests This
The rules above were already in place at the 4 February 2025 cut-off: the 90-day renewal window and 90-day deemed issue took effect on 28 January 2025. Older notes still say 45 days and 15 days. Use 90 and 90.
Expect questions on who issues the AFA (the IPA), how long it lasts (one year, aligned to a half-year end), the age limit (70) and what happens to an ongoing assignment when it expires (it continues). A frequent trap offers "IBBI" as the issuing authority or "five years" as the validity, which is the term of an IPA's own certificate of registration.
FAQs
What is an authorisation for assignment for insolvency professionals?expand_more
A permission issued by an insolvency professional agency to its professional member to take assignments under the Code. Without a valid AFA on the date of acceptance, an IP cannot accept or start an assignment (regulation 7A).
What is the validity of an AFA?expand_more
One year from issue or renewal, extended to the next 30 June or 31 December, and ending earlier if the IP turns 70.
Is there an age limit for an authorisation for assignment?expand_more
Yes. An IP who has attained 70 is not eligible, and an AFA issued earlier lapses on the date the IP turns 70.
Can an insolvency professional hold a job while holding an AFA?expand_more
No. Being out of employment is an eligibility condition, and clause 23 of the Code of Conduct bars employment while holding a valid AFA or undertaking an assignment.
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