Module: General Practice
Q134: 'TechNova Solutions', an MSME, is facing financial stress. The promoters want to resolve the debt but wish to retain management control to preserve business continuity. Which mechanism under IBC is most suitable for them?
✅ Correct Answer: B
Suitability: PPIRP (Pre-Pack) is the ideal mechanism for this scenario.
Key Feature: Unlike CIRP, which is "Creditor-in-Control", PPIRP is a "Debtor-in-Possession" model.
The existing promoters continue to manage the company while a resolution plan is negotiated with creditors.
Eligibility: It is available only for MSMEs like TechNova.
Efficiency: It is faster and less disruptive to the business than standard CIRP.
Key Feature: Unlike CIRP, which is "Creditor-in-Control", PPIRP is a "Debtor-in-Possession" model.
The existing promoters continue to manage the company while a resolution plan is negotiated with creditors.
Eligibility: It is available only for MSMEs like TechNova.
Efficiency: It is faster and less disruptive to the business than standard CIRP.