By S&S Co. Advocates & Solicitors · Published 28 September 2026 · Informational content, not legal advice: see our disclaimer
Overview
A practical explainer for MSME promoters and creditors on eligibility, the debtor-in-possession structure, and how PPIRP differs from ordinary CIRP.
What You Need to Know
- Introduced by the IBC (Amendment) Act, 2021 as Chapter III-A (Sections 54A-54P), available only to corporate debtors classified as MSMEs
- Default threshold: minimum ₹10 lakh, subject to the ceiling notified by the Ministry of Corporate Affairs; debtor must not be barred under Section 29A
- Debtor-in-possession, creditor-in-control model: unlike CIRP, existing management typically continues to run the business under RP oversight
- Eligibility conditions: no PPIRP or completed CIRP in the preceding 3 years, base resolution plan prepared before filing, approval of unrelated financial creditors required before filing
- 120-day overall timeline from the pre-packaged insolvency commencement date, materially faster than CIRP's statutory outer limits
- Why PPIRP has seen very low uptake in practice and what founders should weigh before choosing it over CIRP or an informal restructuring
Frequently Asked Questions
Who is eligible to use the PPIRP route?
Only corporate debtors classified as MSMEs, above a minimum default threshold of Rs. 10 lakh (subject to the ceiling notified by the Ministry of Corporate Affairs), and not barred under Section 29A.
How is PPIRP different from ordinary CIRP for the promoters?
PPIRP follows a debtor-in-possession, creditor-in-control model, existing management typically continues to run the business under RP oversight, unlike ordinary CIRP.
How long does a PPIRP process take compared to CIRP?
It runs on a 120-day overall timeline from the pre-packaged insolvency commencement date, materially faster than CIRP's statutory outer limits, though uptake in practice has stayed very low.
References & Further Reading
This guide references the following statutes, rules and sources, cross-checked at the time of writing.
- Default threshold minimum ₹10 lakh as notified by MCA: confirmed via enterslice.com, ibbi.gov.in materials
- 120-day timeline from commencement date: confirmed
- 3-year cooling-off from prior PPIRP/CIRP: confirmed via lawbhoomi.com and enterslice.com
- See also our IBC & Insolvency Notable Judgments and Legal Updates: IBC & Insolvency archive.