Window closes today for submitting comments on Voluntary Liquidation regulations
The window for submitting stakeholder comments on draft regulations for voluntary liquidation under the Insolvency and Bankruptcy Board of India (IBBI) closes today.
On February 14, the board had invited public comments on the Draft Regulations for Voluntary Liquidation giving time till March 8.
The Ministry of Corporate Affairs had set-up four working groups of experts and practitioners to facilitate implementation of the Insolvency and Bankruptcy Code, 2016. The Working Group-3, which had earlier developed draft regulations for corporate insolvency resolution and liquidation process, was responsible for submitting the draft regulations for Voluntary Liquidation of Corporate Persons.
The draft regulations outline various conditions for initiating voluntary liquidation by corporate persons subject to conditions, namely, through an affidavit stating 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" and that the "the corporate person is not being liquidated to defraud any person."
The draft regulations also outline a time limit of four weeks, within which to secure a resolution passed by a special majority of the partners or contributors, after which the liquidation process would commence.
The corporate entity under the process, the regulations note, "shall from the voluntary liquidation commencement date cease to carry on its business except as far as required for the beneficial winding up of its business, provided that the corporate state and corporate powers of the corporate person shall continue until it is dissolved."
The Insolvency and Bankruptcy Code, 2016 and its implementation has been hailed as the biggest economic reform in the country, next only to GST. However, all rules and regulations with respect to the code are yet to be notified.
Speaking at a PHD Chamber event on Tuesday, the chairperson of the IBBI, M S Sahoo admitted that the code still has certain gaps although regulations have been notified after due diligence and intense public discourse with all concerned stakeholders. He had further added that if needed, the IBBI could still consider amendment to them provided the demand for such an initiative a justified on all grounds.
The code describes a system comprising of the National Company Law Tribunal and the Debt Recovery Tribunal and their appellate tribunals, the Insolvency and Bankruptcy Board of India, Insolvency Professionals (IPs), Insolvency Professional Agencies (IPAs) and Insolvency Professional Entities (IPEs) for implementation of the code.
IRR Insolvency Professionals Private Limited and AAA Insolvency Professionals LLP were notified as the first IPEs on March 6, signalling progress on setting up the envisaged ecosystem.
On February 14, the board had invited public comments on the Draft Regulations for Voluntary Liquidation giving time till March 8.
The Ministry of Corporate Affairs had set-up four working groups of experts and practitioners to facilitate implementation of the Insolvency and Bankruptcy Code, 2016. The Working Group-3, which had earlier developed draft regulations for corporate insolvency resolution and liquidation process, was responsible for submitting the draft regulations for Voluntary Liquidation of Corporate Persons.
The draft regulations outline various conditions for initiating voluntary liquidation by corporate persons subject to conditions, namely, through an affidavit stating 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" and that the "the corporate person is not being liquidated to defraud any person."
The draft regulations also outline a time limit of four weeks, within which to secure a resolution passed by a special majority of the partners or contributors, after which the liquidation process would commence.
The corporate entity under the process, the regulations note, "shall from the voluntary liquidation commencement date cease to carry on its business except as far as required for the beneficial winding up of its business, provided that the corporate state and corporate powers of the corporate person shall continue until it is dissolved."
The Insolvency and Bankruptcy Code, 2016 and its implementation has been hailed as the biggest economic reform in the country, next only to GST. However, all rules and regulations with respect to the code are yet to be notified.
Speaking at a PHD Chamber event on Tuesday, the chairperson of the IBBI, M S Sahoo admitted that the code still has certain gaps although regulations have been notified after due diligence and intense public discourse with all concerned stakeholders. He had further added that if needed, the IBBI could still consider amendment to them provided the demand for such an initiative a justified on all grounds.
The code describes a system comprising of the National Company Law Tribunal and the Debt Recovery Tribunal and their appellate tribunals, the Insolvency and Bankruptcy Board of India, Insolvency Professionals (IPs), Insolvency Professional Agencies (IPAs) and Insolvency Professional Entities (IPEs) for implementation of the code.
IRR Insolvency Professionals Private Limited and AAA Insolvency Professionals LLP were notified as the first IPEs on March 6, signalling progress on setting up the envisaged ecosystem.
