insolvency resolution process (PIRP). Unlike CIRP, PIRP may be initiated only by debtors. The debtor should have a base resolution plan in place. During PIRP, the management of the company will remain with the debtor.

Minimum default amount Application for initiating PIRP may be filed in the event of a default Minimum default amount Application for initiating PIRP may be filed in the event of a default default amount of at least one lakh rupees. The central government mayincrease the threshold of minimumdefault up to one crore rupees through a notification.

Debtors eligible for PIRP PIRP may be initiated in the event of a default by a corporate debtor Debtors eligible for PIRP PIRP may be initiated in the event of a default by a corporate debtor eligible for PIRP classified as an MSMEunder the MSMEDevelopment Act, 2006. Currently, under the 2006 Act, an enterprise with an annual turnover of up to Rs 250 crore, and investment in plant and machinery or equipment up to Rs 50 crore, is classified as an MSME. For initiating PIRP, the corporate debtor himself is required to apply to the adjudicating authority (National Company Law Tribunal). The authority must approve or reject the application for PIRP within 14 days of its receipt.

Approval of financial creditors For applying for PIRP, the debtor needs to obtain approval of at Approval of financial creditors For applying for PIRP, the debtor needs to obtain approval of at of financial creditors least 66% of its financial creditors (in value of debt due to creditors) who are not related parties of the debtor. Before seeking approval, the debtor must provide creditors with a base resolution plan. The debtor must also propose the name of the RP along with the application for PIRP. The proposed RP must be approved by at least 66% of the financial creditors.

Proceedings under PIRP The debtor will submit the base resolution plan to the RP within two Proceedings under PIRP The debtor will submit the base resolution plan to the RP within two under PIRP days of the commencement of the PIRP. Acommittee of creditors will be constituted within seven days of the PIRP commencement date, which will consider the base resolution plan. The committee may provide the debtor with an opportunity to revise the plan. The RP may also invite resolution plans from other persons. Alternative resolution plans may be invited if the base plan: (i) is not approved by the committee, or (ii) is unable to pay the debt of operational creditors (claims related to the provision of goods and services).

A resolution plan must be approved by committee by a vote of at least 66% of the voting A resolution plan must be approved by committee by a vote of at least 66% of the voting resolution plan must be approved by shares. A resolution plan must be approved by the committee within 90 days from the commencement date of PIRP. The resolution plan approved by the committee will be examined by the adjudicating authority. If no resolution plan is approved by the committee, the RP may apply for termination of PIRP. The authority must either approve the plan or order termination of PIRP within 30 days of receipt. Termination of PIRP will result in the liquidation of the corporate debtor.

Moratorium During PIRP, the debtor will be provided with a moratorium under which certain Moratorium During PIRP, the debtor will be provided with a moratorium under which certain actions against the debtor will be prohibited. These include filing or continuation of suits, execution of court orders, or recovery of property.

Management of debtor during PIRP During the PIRP, the board of directors or partners of the Management of debtor during PIRP During the PIRP, the board of directors or partners of the of debtor during PIRP debtor will continue to manage the affairs of the debtor. However, the management of the debtor may be vested with the RP if there has been fraudulent conduct or gross mismanagement.