The full form of IRP in law is the Insolvency Resolution Process. Under the 2016 Insolvency and Bankruptcy Code, the National Company Law Tribunal (NCLT) starts a corporate insolvency resolution procedure (CIRP) when a business stops paying its creditors. This process is known as the (IRP). An application to start an IRP after default can be submitted to NCLT by a business entity, operational creditor, or financial creditor. A homebuyer may also approach NCLT to start an IRP in the event of a housing project after the code is amended if the developer does not provide the buyer with possession of the home or return the money.
IRP Process
Under the Insolvency Resolution Process, some interim resolution practitioners are designated, and these practitioners have the authority to assume control of the defaulted company. The professional’s job is to take the required actions to bring the business back to life. Furthermore, the appointed professional also has the authority to raise new money to keep the business running.
The Insolvency Resolution Process seeks to establish a structured legal process to deal with situations in which businesses are unable to make their debt payments. Under the direction of experts, it seeks to maximize the value of the business’s assets while also maintaining a healthy balance between the demands of all parties.