IBBI Notifies The Amended Insolvency And Bankruptcy Board Of India (Voluntary Liquidation Process) Regulations, 2017

Reason For The Amendment

The Voluntary Liquidation Regulations encompasses the process of voluntary liquidation to be followed by a solvent corporate person. It was realized that the process of liquidation was being substantially delayed despite the fact that liquidation does not involve claim of creditors; has fewer assets (if any) to be realized; and fewer litigations (if any) to be concluded. Therefore, in order to curtail such delays and ensure faster exit for firms, amendments have been made to modify the timelines for activities undertaken during the voluntary liquidation process.

Amendments

The following amendments have been incorporated:

1. The Liquidator shall prepare the list of stakeholders within 15 days (against the previously stipulated 45 days) from the last date for receipt of claims, where no claim from creditors has been received till the last date for receipt of claims.
2. The Liquidator shall distribute the proceeds from realization within 30 days (against the previously stipulated 6 months) from the receipt of the amount to the stakeholders.
3. The Liquidator shall endeavour to complete the liquidation process of the corporate person within 270 days from the liquidation commencement date, where the creditors have approved the resolution under Section 59(3)(c) or Regulation 3(1)(c), and 90 days from the liquidation commencement date in all other cases (against the previously stipulated 12 months in all situations).
4. In order to provide summary of actions taken by the Liquidator during the voluntary liquidation process, the amended Voluntary Liquidation Regulations specify a compliance certificate which is required to be submitted along with application under Section 59(7) to the Adjudicating Authority, by the Liquidator. It shall facilitate the Adjudicating Authority to adjudicate dissolution applications expeditiously.

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