After the introduction of Insolvency and Bankruptcy Code, 2016, the provisions of voluntary winding up have been removed from the Companies Act, 2013.

Section 59 of the IBC, 2016deals with the voluntary liquidation of corporate persons. This section was notified on 30^th March 2017 by Ministry of Corporate Affairs.

Sub Section 1: – A corporate person –

1. with the intention of liquidating itself voluntarily and;
2. who has not committed any default

may initiate the proceedings for voluntary liquidation for the same under this section.

Sub Section 2: – Such corporate person shall also meet conditions and requirements as specified by the Board.

Sub Section 3: – Following conditions to be met by the Company for voluntary liquidation: – (This sub-section specifically provides the conditions for a company)

PROVISO – If the Company owes any debt, then creditors of two-third of the value of debt shall approve SR of voluntary liquidation within 7 days of passing it.

(The declaration by directors as stated above shall be filed with ROC in FORM GNL-2 along with the attachments as mentioned)

Regulation 3 of Insolvency and Bankruptcy Board of India (voluntary liquidation process) Regulations, 2017 provides the conditions for corporate persons other than company which are listed as follows: –

Sub Section 4: – Company to notify ROC and Board about SR within 7 days of passing or approval by creditors, as the case may be.

Sub Section 5: – Date of commencement of voluntary liquidation proceedings shall be deemed to be the date of passing of SR subject to the approval of creditors.

Regulation 14 of IBBI (voluntary liquidation process) Regulations, 2017 states that the liquidator shall make a public announcement within 5 days of his appointment in FORM A for calling stakeholders to submit their claims within 30 days from liquidation commencement date and such announcement shall be published: –

1. In 1 English and 1 Regional language where regd. Office of corporate person is situated or where material business operations are there.
2. On website, if any
3. On website designated by Board, if any

Regulation 34 of IBBI (voluntary liquidation process) Regulations, 2017 states that a new bank account with scheduled bank must be opened with the word ‘In Voluntary Liquidation’ at last after the name of corporate person for receiving and paying settlement amount. Each and every financial transaction must be settled through this account.

Sub Section 6: – Provisions of Sections 35 to 53 and Chapter VII shall apply in case of voluntary liquidation proceedings with such modifications as necessary.

Regulation 9 of IBBI (voluntary liquidation process) Regulations, 2017 states that the liquidator shall prepare a preliminary report and submit the same to corporate person within 45 days of liquidation commencement date containing the following details: –

Sub Section 7: – After the winding up of affairs and liquidation of assets, liquidator to make application to Adjudicating Authority for the dissolution of such corporate person.

Regulation 38 of IBBI (voluntary liquidation process) Regulations, 2017 states that liquidator shall prepare a final report on completion of the liquidation process and submit the same to ROC, IBBI and Adjudicating Authority along with the application of dissolution. The final report consists the following details: –

Sub Section 8: – The Adjudicating Authority will then pass an order for dissolution accordingly.

Sub Section 9: – Copy of the order passed to be filed with the concerned authority of corporate person within 14 days from date of order. (In case of Company to be filed with ROC in FORM INC-28)