What Is The Full Form Of IRP In Law?

IRP full form in law is Insolvency Resolution Process. This is a legal set of rules found under the Insolvency and Bankruptcy Code (IBC) from 2016 in India. It is made to help those companies that are running out of money and cannot pay their debts. These simple objectives would ensure quick fixing of the money problems, make the most possible from what the company owns, treat everybody involved in the business fairly, encourage people to start new businesses and ensure that loans are available.

The IRP sets up an organized legal method to handle cases where companies can’t pay their debts. It aims to get the most value from the company’s assets and keep a good balance between the needs of everyone involved, managed by professionals.

Legal Framework and Procedural Details:

The IBC, which became a law in May 2016, backs the IRP. It updates and brings together laws concerning the reorganizing and fast resolution of insolvency cases. The IRP must be finished within 330 days from when it starts, including any delays from extensions or legal issues. The key steps in this process include filing the insolvency application to the National Company Law Tribunal (NCLT), announcing a stop on all debt collection, also known as “moratorium,” making a public announcement of the insolvency, constituting a committee of creditors, preparing and obtaining approval for a plan to solve the insolvency. If the plan is approved, then it gets implemented, but if not, the company is closed down, and the assets are sold off.