The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2016. These Regulations envisage for voluntary liquidation of a body corporate.
As per these Regulations, body corporate includes the following: –
Further these Regulations provide that any corporate body may initiate a voluntary liquidation process, provided majority of designated partners or directors, as the case may be, furnish a declaration to the effect that:-
If the liquidator is of the opinion that the liquidation is proposed to defraud any persons, he shall make an application to the Adjudicating Authority, and hence liquidation shall be suspended.
Further these Regulations provide for 2 main prohibitions. These are:
Thus, the liquidator and the professional(s) assisting him in liquidation are required to make continuing disclosures in respect of personal or pecuniary relationship with any of the stakeholders or the corporate person.
These Regulations require the liquidator to preserve a physical or electronic record of all the proceedings for at least eight years after the dissolution of the corporate person either with himself or with an information utility.