Insolvency and Bankruptcy Board Notifies Rules

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The Insolvency and Bankruptcy Board of India (‘IBBI’) was established under Insolvency and Bankruptcy Code, 2016 (‘Code’).

IBBI has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation) Regulations, 2017 (‘Regulation’).

It came into force with effect from 1st April 2017. The Regulation provides for a complete framework for the voluntary liquidation of any corporate person.

Corporate person is defined under Section 3(7) of the Code as any company incorporated under the Companies Act and includes limited liability partnership or any other person incorporated with limited liability but does not include any financial service provider.

However, the explanation attached to Regulation 3(3) of the Voluntary Liquidation Regulation specifies that the Regulation 3(1) to 3(3) applies to corporate person other than a ‘company’.

The procedure for voluntary liquidation of a company has been provided under Section 59 of the Code.

The regulations specify the manner and content of public announcement, receipt and verification of claims of stakeholders, reports and registers to be maintained, preserved and submitted by the liquidator, realization of assets and distribution of proceeds to stakeholders, distribution of residual assets, and finally dissolution of corporate person.

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