IBBI invites comments latest by 8 March 2017 on the Exposure Draft of IBBI (Voluntary Liquidation) Regulations, 2017; Rules for Voluntary Liquidation by Companies
Insolvency and Bankruptcy Board of India (IBBI) has invited comments from public/stakeholders, latest by 8 March, 2017, on the Exposure Draft of Regulations for Voluntary Liquidation, i.e. IBBI (Voluntary Liquidation) Regulations, 2017, which may be followed by Companies/ Corporates for voluntary liquidation under the Bankruptcy Code 2016.
As per proposed regulations, a company going for fast track voluntary liquidation should mainly fulfill the following conditions:
i) company should be solvent, i.e. in case of loan defaults or debt outstanding, the company should be able to pay the same by selling the assets.
ii) directors declaration that company is solvent and is capable to pay the dues of the creditors;
iii) special resolution in general meeting approving voluntary liquidation and appointment of liquidator/ insolvency professional; and
iii) creditors’ approval for liquidation/ winding up process by two thirds majority.
It may be noted that the MCA had set-up four Working Groups to facilitate implementation of the Insolvency and Bankruptcy Code, 2016. The Working Group-3 had a mandate to deliberate and submit its recommendations on rules and regulations and other related matters for the insolvency and liquidation process under the Insolvency and Bankruptcy Code, 2016. This Working Group had earlier developed draft regulations for corporate insolvency resolution and liquidation process. Based on these drafts and after considering public comments on the same and following the due process, the Insolvency and Bankruptcy Board of India (Board) has notified
(a) the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and
(b) the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.
This Working Group has now submitted draft regulations for Voluntary Liquidation of Corporate Persons. A corporate person who has not committed any default may initiate voluntary liquidation subject to certain conditions.
The comments may be submitted online at ‘FEEDBACK’ on the IBBI website or by email at firstname.lastname@example.org