Government notifies regulations for voluntary liquidation

NEW DELHI: The government has notified regulations for voluntary liquidation under the Insolvency and Bankruptcy Code.

Companies, limited liability partnerships and any other persons incorporated with limited liability can opt for voluntary liquidation.

The new regulation has become effective from April 1, the Ministry of Corporate Affairs said in a notification.

As per the norms, a corporate person may initiate a voluntary liquidation proceeding subject to various conditions, including that majority of the directors or designated partners of the corporate person make a declaration to that effect.

Besides, an insolvency professional is prohibited from acting as a liquidator for a corporate person if he is not independent of the entity concerned.

Further, the liquidator and professionals assisting him in liquidation are required to make disclosures -- initial and continuing -- about pecuniary or personal relationship with any of the stakeholders or the corporate person.