CIRP Step explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
The Corporate Insolvency Resolution Process (CIRP) is the structured procedure under the Insolvency and Bankruptcy Code 2016 for resolving corporate insolvency. This step-by-step guide walks through each stage from filing the application to resolution or liquidation.
Step 1: Filing the Application
- Financial Creditor (Section 7): File Form 1 before NCLT with proof of default (bank statement, CIBIL records, financial contract). No prior notice to corporate debtor required.
- Operational Creditor (Section 9): First send 10-day demand notice (Form 3) to corporate debtor. If default not cured, file Form 5 before NCLT.
- Corporate Debtor (Section 10): File Form 6 with board resolution authorizing filing.
Step 2: NCLT Admission — 14 Days
NCLT must admit/reject the application within 14 days of filing. If incomplete: 7 days to cure defects. On admission, NCLT appoints an Interim Resolution Professional (IRP) and declares moratorium.
Step 3: Public Announcement — Day 1-3
IRP issues a public announcement within 3 days of appointment inviting claims from all creditors. Published in newspapers + IBBI website. Creditors must submit claims within 14 days of announcement.
Step 4: Constitution of CoC — Day 30
IRP collates and verifies all claims, then constitutes the Committee of Creditors. CoC first meeting held within 7 days of constitution. CoC may replace IRP with a new Resolution Professional by 66% vote.
Step 5: Information Memorandum
RP prepares an Information Memorandum — a comprehensive document about the corporate debtor's business, assets, liabilities, and operations. Potential resolution applicants use this for due diligence.
Step 6: Resolution Plan Invitation
RP issues Request for Resolution Plans (RFRP) to potential resolution applicants (eligible under Section 29A). Resolution applicants submit plans including: treatment of all creditors, management restructuring, capital infusion, operational changes.
Step 7: CoC Approval of Resolution Plan
CoC evaluates plans and approves one by 66% voting share. Approved plan sent to NCLT for final approval. NCLT approval makes the plan binding on all stakeholders including dissenting creditors.
Step 8: NCLT Order
NCLT approves the resolution plan, which becomes binding. New management takes over. All previous debts (except CIRP costs) are settled per the plan. Section 32A grants immunity from prosecution for the new acquirer for prior offences.
If No Resolution Plan — Liquidation
If no plan is approved within 180/270 days, NCLT orders liquidation. Liquidator takes over, assets are sold, and proceeds distributed as per the waterfall order.
NCLT Powers During CIRP
- Stay all proceedings against corporate debtor
- Approve/reject resolution plans
- Adjudicate avoidance transactions (Section 43-51)
- Order liquidation
- Approve fees of IRP/RP
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Key Facts About CIRP Step
- Applies in: All states across India, under the relevant central law.
- Mode: Mostly online via the official government portal.
- Typical timeline: Ranges from a few days to a few weeks depending on the case.
- Non-compliance: May attract penalties, interest or late fees.
- Expert help: TaxClue completes the entire process end to end for you.
How many days does NCLT have to admit a CIRP application?
14 days from receipt of the application. If incomplete, 7 days are given to the applicant to cure defects.
What is the first step for an operational creditor before filing CIRP?
Send a 10-day demand notice (Form 3) to the corporate debtor. If the default is not paid/disputed within 10 days, file Form 5 before NCLT.
Over 90% of compliance penalties in India arise from missed due dates — timely handling can save businesses thousands of rupees each year.
CIRP Step: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.
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Why This Matters
Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in ibc insolvency are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.
Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines.