Voluntary Liquidation under IBC

Governed by Section 59, Insolvency and Bankruptcy Code 2016, read with the IBBI (Voluntary Liquidation Process) Regulations 2017 — available only to a solvent corporate person that either has no debt or is able to pay its debts in full from the proceeds of assets to be sold in the liquidation. Process: a majority of the company's directors make a declaration of solvency verified by affidavit, accompanied by audited financial statements and a valuation report; within four weeks of that declaration, the members pass a special resolution (or, for an LLP, the partners pass a resolution) approving voluntary liquidation and appointing a registered insolvency professional as liquidator; where the company owes any debt, creditors representing two-thirds in value must additionally approve the resolution within seven days of it being passed. The liquidator must endeavour to complete the liquidation within 270 days from the liquidation commencement date where creditors have approved the process, or within 90 days in all other cases; exceeding either timeline requires the liquidator to convene a meeting of contributories within 15 days of the timeline's expiry and file a status report with the IBBI within seven days of that meeting.

Voluntary liquidation is the solvent winding up of a company under Section 59 of the Insolvency and Bankruptcy Code 2016 and the Companies (Winding Up) Rules 2020 — the declaration of solvency by the directors, the members' resolution, the appointment of the insolvency professional as the liquidator, the claims and the asset realisation, the distribution to the members, and the dissolution with the NCLT. The voluntary liquidation is the orderly exit of the solvent company that has ceased to carry on business, and it is the IBC's route for the clean wind-down.

The voluntary liquidation is the structured ending of a solvent company — the declaration of solvency, the resolution, the liquidator, the claims and the realisation, the distribution and the dissolution — run under Section 59 of the IBC and the Winding Up Rules 2020, with the NCLT's approval at the end. The process is the professional winding down of the company's affairs, and its quality decides how cleanly the company's legal life ends.

The cost of an unmanaged exit is the company that never ends: the accumulated compliance, the creditors and the claims unresolved, the assets undistributed, and the company and its directors carrying the entity that should have been wound down.

This service is for solvent companies ceasing operations. We assess the solvency and the eligibility under Section 59, prepare the declaration and the resolution, appoint the liquidator and manage the process — the claims, the realisation, the distribution — and obtain the dissolution from the NCLT, so the company's exit is the clean, compliant winding down the IBC provides.