Corporate insolvency can be a daunting process, both for affected companies and their creditors. Understanding the corporate insolvency resolution process (CIRP) is crucial for stakeholders involved in business operations. The following sections will break down the various elements of the CIRP, including initiation, timelines, fast track processes, procedures, and liquidation.

Persons Who May Initiate the Process (Sec. 6 to 11)

The initiation of the Corporate Insolvency Resolution Process can be undertaken by various parties as per the provisions outlined in Sections 6 to 11 of the Insolvency and Bankruptcy Code (IBC).

One of the primary entities that can initiate the CIRP is the corporate debtor itself. This affords companies the opportunity to take proactive measures to address their financial distress before it escalates beyond management’s control.

Creditors are also pivotal in this process, as they can file for the CIRP when they believe that the corporate debtor is unable to pay its dues. Secured creditors, such as banks or individuals who hold collateral against loans, and operational creditors, who provide goods or services without immediate payment, have distinct rights and obligations when initiating the CIRP.

Additionally, the corporate debtor's shareholders or partners can initiate the process under specific conditions. Such provisions are essential in ensuring that all relevant parties can seek resolution for their financial grievances.