Insolvency and Bankruptcy Code, 2016 (IBC) requires the compliance of the following additional requirements for for voluntary wound up of Companies, which are not mentioned in Companies Act, 1956 / Companies Act, 2013:
1. Additional declaration by the directors that company is not wound up to defraud any person;
2. Only insolvency professional can, who meets the eligibility criteria as specified under New Regulations, be appointed as liquidator;
3. Maintenance and preservation of various registers in the prescribed manner;
4. Preparation of various reports by the liquidator as to be submitted to a corporate person, Registrar of Companies (“ROC“); and the Insolvency and Bankruptcy Board of India (“Board“);
5. Receipt of stakeholders claims by liquidator only in specified forms;
6. The liquidator shall endeavour to wind up the affairs of the corporate person within 12 (twelve) months from the voluntary liquidation commencement date;
7. Under New Regulations, the Government has also reduced the time period of various compliances. Below is the brief procedure of voluntary liquidation of a corporate person under IBC:
Step I: Submission of declaration(s) to ROC, stating that the company will be able to pay its dues and is not being liquidated to defraud any person;
Step II: Passing of special resolution for approving the proposal of voluntary liquidation and appointment of liquidator (“Approval“), within 4 (four) weeks of the aforesaid declaration(s). If a corporate person owes debts, approval of two-third majority creditors would also be required;
Step III: Public announcement inviting claims of all stakeholders, within 5 (five) days of such Approval, in newspaper as well as on website of the corporate person;
Step IV: Intimation to the ROC and the Board about the Approval, within 7 (seven) days of such Approval;
Step V: Preparation of preliminary report about the capital structure, estimates of assets and liabilities, proposed plan of action etc., and submission of the same to a corporate person within 45 (forty-five) days of such Approval;
Step VI: Verification of claims, within 30 (thirty) days form the last date for receipt of claims and preparation of list of stakeholders, within 45 (forty-five) days from the last date for receipt of claims;
Step VII: Opening of a bank account in the name of the corporate person followed by the words ‘in voluntary liquidation’, in a scheduled bank, for the receipt of all moneys due to the corporate person;
Step VIII: Sale of assets, recovery of monies due to corporate person, realization of uncalled capital or unpaid capital contribution;
Step IX: Distribution of the proceeds from realization within 6 (six) months from the receipt of the amount to the stakeholders;
Step X: Submission of final report by the liquidator to the corporate person, ROC and the Board and application to the National Company Law Tribunal (“NCLT”) for the dissolution;
Step XI: Submission of NCLT order regarding the dissolution, to the concerned ROC within 14 (fourteen) days of the receipt of order.
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