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Introduction for Interim Resolution Professional?

Interim Resolution Professional in IBC is licensed insolvency professional appointed to manage company affairs during insolvency proceedings. An Interim Resolution Professional (IRP) is a professional appointed by the National Company Law Tribunal (NCLT) in India to manage the affairs of a company undergoing the insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. The IRP plays a crucial role in the resolution process as they are responsible for taking control of the company’s operations, safeguarding its assets, and formulating a resolution plan that aims to revive the company or to sell its assets in a manner that maximizes the value for all stakeholders.

The appointment of an IRP typically occurs after the admission of a petition for insolvency resolution by the NCLT. The IRP takes over the management of the company from its existing directors and has the power to appoint professionals such as accountants, lawyers, and valuers to assist them in their work.

The IRP is required to submit a detailed report on the financial position of the company within 30 days of their appointment. Based on this report, the NCLT may pass an order for the commencement of the insolvency resolution process or reject the application if it is found to be defective. The IRP then continues to manage the affairs of the company until a resolution plan is approved by the NCLT or the company is liquidated.

The role of the IRP is critical in ensuring the smooth functioning of the insolvency resolution process and in safeguarding the interests of all stakeholders involved. The IRP is expected to be independent, impartial, and objective in their decision-making and is accountable to the NCLT for their actions.

What is Interim Resolution Professional?

An Interim Resolution Professional (IRP) is a person appointed by the National Company Law Tribunal (NCLT) in India to manage the affairs of a company undergoing a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The IRP is responsible for performing various functions, including taking control of the company’s assets, forming a committee of creditors, inviting resolution plans from prospective bidders, and managing the day-to-day operations of the company until a resolution plan is approved.

The IRP is appointed for a period of 30 days, which can be extended to a maximum of 90 days by the NCLT. During this period, the IRP must take all necessary steps to revive the company and maximize its value for the benefit of its creditors. If a resolution plan is not approved within the specified time frame, the company may be liquidated, and the IRP will act as the liquidator.

To become an Interim Resolution Professional (IRP) in India, one must meet the eligibility criteria specified in the Insolvency and Bankruptcy Board of India (IBBI) regulations. The eligibility criteria for an IRP include:

-A person must be a member of a recognized professional body, such as the Institute of Chartered Accountants of India (ICAI), Institute of Company Secretaries of India (ICSI), or Institute of Cost Accountants of India (ICAI).
-A person must have completed a limited insolvency examination conducted by the IBBI.
-A person must not be a relative or an employee of the company or its creditors.

Once a person meets the eligibility criteria, they can register as an insolvency professional with the IBBI. After registering with the IBBI, they can apply to become an IRP by filing an application with the National Company Law Tribunal (NCLT) in the relevant jurisdiction.

The NCLT will review the application and, if satisfied, will appoint the applicant as the IRP for the company undergoing the corporate insolvency resolution process (CIRP). Once appointed, the IRP must follow the rules and regulations of the IBBI and the NCLT while managing the affairs of the company.

Yes, an advocate can become an insolvency professional in India. According to the Insolvency and Bankruptcy Code, 2016, any person who is registered with the Insolvency and Bankruptcy Board of India (IBBI) as an insolvency professional can act as an insolvency professional in the resolution process of a distressed company.

Advocates can register themselves with the IBBI as insolvency professionals if they meet the eligibility criteria prescribed by the board. The eligibility criteria include having a minimum of 10 years of experience as a professional in areas such as law, finance, or management, passing a limited insolvency examination conducted by the IBBI, and completing a pre-registration educational course.

Once registered, advocates can take up assignments as insolvency professionals, where they will be responsible for managing the affairs of the company undergoing the insolvency resolution process. This includes conducting an independent evaluation of the company’s financial position, preparing a resolution plan, and overseeing the implementation of the resolution plan.

The salary of an insolvency professional in India may vary depending on several factors such as experience, qualifications, and the size and complexity of the cases they handle. However, the Insolvency and Bankruptcy Board of India (IBBI) has specified the minimum fee that can be charged by insolvency professionals for their services under the Insolvency and Bankruptcy Code (IBC).

As per the IBBI regulations, an insolvency professional can charge a fee of up to 1% of the amount of the financial debt involved, subject to a minimum fee of INR 1 lakh (approximately USD 1,340) and a maximum fee of INR 1 crore (approximately USD 134,000). However, the actual fee charged by an insolvency professional may vary based on negotiations with the stakeholders involved in the insolvency resolution process.

In addition to the fee charged for their services, an insolvency professional may also be entitled to reimbursement of expenses incurred in the course of their work, such as travel and accommodation expenses, subject to certain limits specified by the IBBI.

It is worth noting that the fees and expenses charged by an insolvency professional must be reasonable and commensurate with the services provided. The IBBI has set guidelines to ensure that insolvency professionals charge reasonable fees and expenses and avoid any conflict of interest while carrying out their duties.

The Interim Resolution Professional (IRP) is an independent professional appointed by the National Company Law Tribunal (NCLT) to manage the affairs of a company undergoing a corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC) in India. The IRP is granted certain powers and duties under the IBC, which include:

-Taking control of the management of the company: The IRP has the power to take control of the management of the company and its assets, including its bank accounts, books of accounts, and financial statements.
-Formulating a resolution plan: The IRP is responsible for formulating a resolution plan for the company in consultation with the committee of creditors (CoC) and presenting it to the NCLT.
-Appointing professionals: The IRP has the power to appoint professionals, such as accountants, lawyers, and valuers, to assist in the resolution process.
-Managing the affairs of the company: The IRP is responsible for managing the day-to-day affairs of the company and taking necessary actions to preserve the value of its assets.
-Investigating the affairs of the company: The IRP has the power to investigate the affairs of the company and report any fraudulent activities to the NCLT.
-Seeking directions from the NCLT: The IRP may seek directions from the NCLT on any matter related to the resolution process.
-Representing the company in legal proceedings: The IRP has the power to represent the company in legal proceedings related to the resolution process.

The powers of the IRP are limited to the duration of the CIRP, which is typically 180 days, with a possible extension of up to 90 days. Once the resolution plan is approved by the NCLT, the IRP’s role ends, and the new management appointed under the plan takes over the affairs of the company.

The duties of a resolution professional (RP) in India, as per the Insolvency and Bankruptcy Code, 2016, are as follows:

Taking over control of the company: The RP is responsible for taking over control of the company from its board of directors and managing its operations during the insolvency resolution process.
Conducting a detailed analysis: The RP is required to conduct a detailed analysis of the company’s affairs, financial position, and assets, and submit a report to the National Company Law Tribunal (NCLT) within a specified time.
Managing the company’s operations: The RP is responsible for managing the company’s operations during the insolvency resolution process and safeguarding its assets.
Constituting a Committee of Creditors: The RP is required to constitute a Committee of Creditors (CoC) consisting of financial creditors of the company, who are responsible for taking decisions related to the insolvency resolution process.
Formulating and submitting a resolution plan: The RP is responsible for formulating a resolution plan that aims to revive the company or sell its assets in a manner that maximizes the value for all stakeholders. The resolution plan must be submitted to the CoC for approval.
Overseeing the implementation of the resolution plan: The RP is responsible for overseeing the implementation of the approved resolution plan and ensuring that it is carried out in a timely and efficient manner.
Ensuring compliance with legal and regulatory requirements: The RP is responsible for ensuring compliance with all legal and regulatory requirements related to the insolvency resolution process.
Facilitating communication and coordination: The RP is responsible for facilitating communication and coordination between all stakeholders involved in the insolvency resolution process, including creditors, shareholders, and employees.

Overall, the duties of a resolution professional are critical in ensuring the smooth functioning of the insolvency resolution process and in safeguarding the interests of all stakeholders involved. The RP must be independent, impartial, and objective in their decision-making and is accountable to the NCLT for their actions.

The Insolvency and Bankruptcy Board of India (IBBI) is the regulatory body that oversees the insolvency resolution process in India. It plays a crucial role in regulating and monitoring the activities of Interim Resolution Professionals (IRPs) who are appointed in insolvency cases.

The following are the key roles of the IBBI with respect to IRPs:

Registration of Insolvency Professional Agencies (IPAs): The IBBI is responsible for registering and regulating the activities of IPAs, which are responsible for enrolling and training IRPs.
Certification of Insolvency Professionals (IPs): The IBBI conducts certification exams for insolvency professionals, including IRPs, and issues certificates to those who clear the exam.
Monitoring the activities of IRPs: The IBBI monitors the activities of IRPs to ensure that they comply with the Insolvency and Bankruptcy Code, 2016 and the regulations and guidelines issued by the IBBI.
Disciplinary action against IRPs: The IBBI has the power to take disciplinary action against IRPs who violate the Code or the regulations and guidelines issued by the IBBI.
Issuing guidelines and regulations: The IBBI issues guidelines and regulations from time to time to ensure the smooth functioning of the insolvency resolution process and to provide guidance to IRPs in carrying out their duties.

Overall, the IBBI plays a critical role in regulating and monitoring the activities of IRPs in India. Its objective is to ensure that the insolvency resolution process is transparent, efficient, and fair to all stakeholders involved. The IBBI strives to maintain the highest standards of professionalism and integrity among IRPs and other insolvency professionals, and to promote the development of a vibrant and effective insolvency resolution ecosystem in India.

Critical Analysis of Interim Resolution Professional in India –

In India, the Insolvency and Bankruptcy Code, 2016 (IBC) introduced a new role of the Interim Resolution Professional (IRP) to oversee the insolvency resolution process. The IRP is appointed by the National Company Law Tribunal (NCLT) and is responsible for managing the assets of the company during the insolvency process.

The IRP is expected to act as a neutral and independent intermediary between the creditors and the company undergoing insolvency proceedings. However, there have been instances of conflict of interest, where the IRP has been found to be biased towards one of the parties involved.

One of the main challenges faced by IRPs in India is the lack of clarity and guidance regarding their roles and responsibilities. This has resulted in inconsistencies in the way different IRPs handle insolvency cases, leading to confusion and delays in the insolvency resolution process.

Additionally, there have been complaints of delay in the appointment of IRPs, which has resulted in the deterioration of the company’s assets and financial position. This has led to a loss of value for creditors and other stakeholders.

There have also been concerns about the qualifications and experience of IRPs. While the IBC mandates that IRPs have to be registered with the Insolvency and Bankruptcy Board of India (IBBI), there have been instances where unqualified individuals have been appointed as IRPs.

Furthermore, there have been instances where IRPs have been accused of lacking transparency and failing to provide adequate information to creditors and other stakeholders.

Overall, while the introduction of the IRP system in India has been a step in the right direction towards efficient insolvency resolution, there is a need for more clarity, transparency, and accountability in the appointment and functioning of IRPs. The IBBI needs to provide clear guidelines on the roles and responsibilities of IRPs and ensure that only qualified and experienced individuals are appointed as IRPs. Additionally, there needs to be a mechanism in place to ensure that IRPs operate transparently and are held accountable for their actions.

Conclusion for Interim Resolution Professional –

In conclusion, an Interim Resolution Professional (IRP) plays a pivotal role in the insolvency resolution process of a company in India. Their appointment marks the beginning of the resolution process and they are tasked with taking over the management of the company, safeguarding its assets, and formulating a resolution plan that maximizes the value for all stakeholders.

The IRP must be independent, impartial, and objective in their decision-making, and is accountable to the National Company Law Tribunal (NCLT) for their actions. They are required to submit a detailed report on the financial position of the company within 30 days of their appointment and continue to manage the company until a resolution plan is approved by the NCLT or the company is liquidated.

The appointment of an IRP is a critical step in the insolvency resolution process and ensures that the interests of all stakeholders, including creditors, shareholders, and employees, are protected. The success of the resolution process largely depends on the competence, integrity, and efficiency of the IRP in managing the affairs of the company and formulating a resolution plan that is fair and feasible.

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Critical Analysis of Interim Resolution Professional in India –

Conclusion for Interim Resolution Professional –

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