Pre-Packaged Insolvency Resolution Process (PPIRP) — MSME Route

The 2021-introduced debtor-in-possession, informal-negotiation-first insolvency route for MSMEs.

What PPIRP is

Introduced in April 2021 specifically for corporate MSME debtors, PPIRP allows the existing management to remain in control (debtor-in-possession, unlike standard CIRP's creditor-in-control model) while a base resolution plan is negotiated informally with financial creditors before the formal NCLT process begins.

Eligibility and initiation

Available only to MSMEs (as classified under the MSMED Act) meeting default-threshold and other eligibility conditions (no CIRP/PPIRP in the preceding 3 years, specific NOC and approval requirements from unrelated financial creditors representing 66% of the debt) — the debtor itself initiates PPIRP, unlike standard CIRP where creditors commonly initiate.

Timeline

PPIRP is designed to complete within 120 days (with a 90-day outer limit for CoC approval of a resolution plan) — faster than standard CIRP, reflecting the pre-negotiated starting point and the smaller, typically less complex MSME debtor profile.

Educational summary of the Insolvency and Bankruptcy Code, 2016, its Regulations and case law as understood at review date 2026-07-18. Not a substitute for the official Code/Regulations text, current NCLT/NCLAT/Supreme Court rulings, or professional advice on a specific matter.

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