Module: General Practice
Q96: Regarding the Pre-packaged Insolvency Resolution Process (PPIRP) for MSMEs introduced under the Insolvency and Bankruptcy Code, consider the following statements:
It is available to corporate debtors classified as MSMEs with a minimum default of 10 Lakh rupees.
Unlike the standard Corporate Insolvency Resolution Process, the PPIRP allows the existing management to remain in control as a "Debtor-in-Possession" during the process.
The maximum time limit for completion of the PPIRP is strictly 270 days.
Which of the statements given above are correct?
Unlike the standard Corporate Insolvency Resolution Process, the PPIRP allows the existing management to remain in control as a "Debtor-in-Possession" during the process.
The maximum time limit for completion of the PPIRP is strictly 270 days.
Which of the statements given above are correct?
✅ Correct Answer: A
Statements 1 and 2 are correct.
PPIRP is a special framework designed for MSME corporate debtors.
The default threshold to trigger PPIRP is 10 Lakh rupees (whereas the standard insolvency process triggers at 1 Crore rupees). A key feature of PPIRP is that it is a "Debtor-in-Possession" model.
The existing promoters retain control of the business operations (unlike standard insolvency where a Resolution Professional takes over). This encourages MSMEs to file for resolution early without fear of losing their company immediately.
Statement 3 is incorrect because the entire process must be completed within 120 days, not 270 days.
PPIRP is a special framework designed for MSME corporate debtors.
The default threshold to trigger PPIRP is 10 Lakh rupees (whereas the standard insolvency process triggers at 1 Crore rupees). A key feature of PPIRP is that it is a "Debtor-in-Possession" model.
The existing promoters retain control of the business operations (unlike standard insolvency where a Resolution Professional takes over). This encourages MSMEs to file for resolution early without fear of losing their company immediately.
Statement 3 is incorrect because the entire process must be completed within 120 days, not 270 days.