One step closer towards Insolvency code regime
Published: Feb 15, 2017
By TIOLCORP News Service
NEW DELHI, FEB 15, 2017: THE Insolvency and Bankruptcy Board of India has released the draft of the IBBI (Voluntary Liquidation) Regulations, 2017 which shall come into force on the date of their publication in the Official Gazette. These Regulations shall apply to the voluntary liquidation of corporate persons under Chapter V of Part II of the Insolvency and Bankruptcy Code, 2016.
The draft regulation provides where a corporate person, other than a company, intends to liquidate itself voluntarily, a majority of the - (a) designated partners, if the corporate person is a limited liability partnership, or (b) persons responsible for exercising its corporate powers, if the corporate person is not a company or a limited liability partnership shall make a declaration, verified by an affidavit stating that they have made a full inquiry into the affairs of the corporate person and they have formed an opinion that either the corporate person has no debt or that it will be able to pay its debts in full from the proceeds of assets to be sold in the voluntary liquidation. The declaration must also state that the corporate person is not being liquidated to defraud any person.
A declaration must be supported by audited financial statements and record of business operations of the corporate person for the previous two years or for the period since its incorporation. A report of the valuation of the assets of the corporate person prepared by a registered valuer is also required. Once the resolution is ratified by the creditors, the winding up process can commence.
Further, all pending applications and petitions relating to voluntary winding up of companies pending before a High Court, shall continue with and dealt with by the High Court in accordance with provisions of the Act till 1st April. 2017 and shall be then transferred to NCLT.
