Corporate Insolvency Resolution Process (CIRP)
The time-bound process under the IBC for resolving insolvency of a corporate debtor, culminating in a resolution plan or liquidation.
Detailed Meaning
CIRP is initiated before the National Company Law Tribunal (NCLT) under Section 7 (by a financial creditor), Section 9 (by an operational creditor, after a demand notice under Section 8 goes unpaid), or Section 10 (by the corporate debtor itself) of the Insolvency and Bankruptcy Code, 2016. On admission, a moratorium under Section 14 bars suits, asset transfers, and recovery action against the corporate debtor, and an Interim Resolution Professional (IRP) takes over management. A Committee of Creditors (CoC), comprising financial creditors, is formed to consider a resolution plan; the CoC may confirm the IRP or appoint a different Resolution Professional. CIRP must ordinarily be completed within 180 days, extendable to a maximum of 330 days including any litigation time. A resolution plan approved by at least 66% of the CoC's voting share, and then by the NCLT, binds the corporate debtor and all stakeholders; if no plan is approved within the timeline, the corporate debtor ordinarily proceeds to liquidation.
Authoritative Sources & Provenance
Relevant Legislation
- The Insolvency and Bankruptcy Code, 2016
Frequently Asked Questions
What is the corporate insolvency resolution process?
The CIRP under the Insolvency and Bankruptcy Code is a time-bound process triggered by a financial or operational creditor's default claim, during which a resolution professional manages the corporate debtor's affairs while the Committee of Creditors considers a resolution plan or, failing that, liquidation.
General legal information for reference only, reviewed for accuracy but not a substitute for advice from a qualified advocate on your specific facts.