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Resolution Professional

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An Insolvency Professional appointed by the NCLT to manage the corporate debtor's affairs during the Corporate Insolvency Resolution Process (CIRP) — replacing the Board of Directors and running the company as a going concern while facilitating the resolution plan.

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Definition

RP Insolvency Professional CIRP Administrator

An Insolvency Professional appointed by the NCLT to manage the corporate debtor's affairs during the Corporate Insolvency Resolution Process (CIRP) — replacing the Board of Directors and running the company as a going concern while facilitating the resolution plan.

The Resolution Professional (RP) under the IBC is a licensed insolvency professional who: (a) manages and operates the corporate debtor as a going concern during the CIRP; (b) takes over the powers of the Board of Directors; (c) collects and collates all claims against the corporate debtor; (d) constitutes the Committee of Creditors (CoC); (e) runs the CIRP process — inviting resolution plans, conducting due diligence, presenting plans to the CoC; and (f) prepares an Information Memorandum for potential resolution applicants. The RP is supervised by the CoC (which may replace the RP by 66% vote) and must comply with the IBBI Code of Conduct for Insolvency Professionals.

Statutory Definition

Section 16(1), Insolvency and Bankruptcy Code, 2016: 'The resolution professional shall be entitled to act as an Interim Resolution Professional during the interim period from the date of the order of the Adjudicating Authority under section 13 till the date of appointment of the resolution professional under sub-section (2) of section 22.' Section 17(1): 'From the date of appointment of the interim resolution professional, the management of affairs of the corporate debtor shall vest in the interim resolution professional.'

Etymology & Origin

From 'resolution' (finding a solution, settling a problem, from Latin 'resolutio' — a loosening, a dissolution, a solution) + 'professional' (a person with specialised expertise). The 'Resolution Professional' is the expert who facilitates 'resolution' — finding a solution for the corporate debtor's financial distress.

Full Legal Analysis

Resolution Professional: The CIRP Manager

The Resolution Professional is the CIRP’s operational core. While the IBC is a legal framework, the RP is the human being who runs it — managing the distressed company, engaging with creditors and potential investors, facilitating the bidding process, and ensuring the CIRP adheres to its statutory timeline. The RP’s quality and competence significantly determines whether the CIRP results in a successful resolution or slides into liquidation.

RP’s Powers and Duties

(a) Management takeover: From appointment, the RP exercises all management functions — the existing Board is suspended (not removed). (b) Claims process: The RP issues a public announcement inviting all creditors to submit their claims; verifies and consolidates claims. (c) Information Memorandum: Prepares a detailed document about the company for potential resolution applicants — business overview, assets, liabilities, financial statements. (d) Resolution plan process: Receives resolution plans from potential acquirers; evaluates them against the RFRP (Request for Resolution Plans); presents qualifying plans to the CoC. (e) Going concern management: Ensures the company continues to operate — suppliers are paid, employees continue, customers are served.

RP vs. Liquidator

(a) Resolution Professional: Appointed during CIRP — objective is to keep the company alive and find a buyer/investor to rescue it. (b) Liquidator: Appointed after liquidation order — objective is to sell assets, pay creditors in priority order, and wind up the company. The same person may serve as both — the RP often becomes the Liquidator if the CIRP fails and liquidation is ordered.

“The Resolution Professional is the IBC’s human face — the professional who takes over a failing company and tries to save it. They must balance the interests of creditors (who want maximum recovery), employees (who want their jobs preserved), and the broader economy (which benefits from going-concern value) — all within a tightly prescribed statutory timeline.”

This Term in Indian Statutes

IBC 17(1)
strict

Insolvency and Bankruptcy Code, 2016, 2016

"From the date of appointment of the interim resolution professional, the management of affairs of the corporate debtor shall vest in the interim resolution professional."

RP takes over management from Board of Directors — suspends Board powers; runs CIRP; facilitates resolution plan process

Other Legislation

Related Terms

Liquidation

The process of dissolving a company by selling its assets, paying its debts (in the prescribed priority order), and distributing any remaining surplus to shareholders — either voluntarily or by order of the NCLT under the Insolvency and Bankruptcy Code, 2016.

Moratorium

A temporary stay on all legal proceedings, enforcement actions, and asset transfers against a corporate debtor — automatically imposed under Section 14 of the IBC from the date of commencement of the Corporate Insolvency Resolution Process (CIRP).

Committee of Creditors

The committee constituted under Section 21 of the IBC comprising all financial creditors of the corporate debtor — which has supreme decision-making authority during the CIRP, approves the resolution plan, and can decide to liquidate the company.

Resolution Plan

A plan submitted by a resolution applicant for the revival of a corporate debtor — approved by the Committee of Creditors (66% vote) and the NCLT — which gives the corporate debtor to the resolution applicant in exchange for payment of the agreed amounts to creditors.

Avoidance Transactions

Transactions entered into by a corporate debtor prior to insolvency that can be set aside by the Resolution Professional or Liquidator under the IBC — including preferential transactions, undervalued transactions, extortionate credit transactions, and fraudulent transactions.
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