Corporate Insolvency Resolution Process (CIRP) is a recovery mechanism for creditors. If a corporate becomes insolvent, a financial creditor, an operational creditor, or the corporate itself may initiate CIRP.
After making an application to respective National Company Law Tribunal (NCLT), CIRP is initiated once the application is approved by the NCLT. CIRP is the process through which Insolvency professional takes controls of all assets of the corporate debtor and will evaluate the assets and liabilities to determine the repayment capability and simultaneously also continues the affairs of the Company and seek for appropriate resolution applicant who can buy the business of the company. If company is not capable of repaying the debt after completion of CIRP period, the company is liquidated with the approval of NCLT.