An IRP (Interim Resolution Professional) is a professional, qualified and appointed by the Insolvency and Bankruptcy Code (IBC), 2016, in the case of a company being placed in the insolvency proceedings. The IRP will assume control of the company at the first phase of the Corporate Insolvency Resolution Process (CIRP).
Stated simply, an IRP is a transient manager who intervenes in the case of a company in severe financial difficulties.
What Does an IRP Do?
Once appointed, the IRP:
● Owns the company and its management and operations.
● Gather information about company assets, liabilities and finances.
● Checks on statements made by creditors.
● Comprise the Committee of Creditors (CoC).
● Maintains the continuity of the company.
This is a period that is not controlled by the existing directors or promoters of the company.
Basic Case Study to Learn the purpose of IRP.
Suppose that the ABC Ltd. cannot settle its loans and goes to CIRP. Here an IRP is assigned. Similar to a short-term manager who is called in to stabilise a failing company, the IRP also makes sure that operations are run on a daily basis whilst creditors make decisions on whether to revive the company.
What is the Importance of the Role of IRP?
IRP is also important as they help preserve a level of fairness between the firm and the lending firms as well as securing company assets and ensuring that the climate is conducive to resolution.
This is why the term IRP is a significant concept that is frequently found in the news related to insolvency and NCLT.
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