Insolvency and Bankruptcy Board of India

No. IBBI/PR/2020/09

05th August, 2020

Press Release

The Insolvency and Bankruptcy Board of India amends the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017

The Insolvency and Bankruptcy Board of India (IBBI) notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Second Amendment) Regulations, 2020 today.

2. The Insolvency and Bankruptcy Code, 2016 enables a corporate person to initiate voluntary liquidation process if it has no debt or it will be able to pay its debts fully from the proceeds of the assets. The corporate person appoints an insolvency professional to conduct the voluntary liquidation process by a resolution of members or partners, or contributories, as the case may be. However, there can be situations which may require appointment of another resolution professional as the liquidator. The amendment made to the Regulations today provides that the corporate person may replace the liquidator by appointing another insolvency professional as liquidator by a resolution of members or partners, or contributories, as the case may be.

3. The amended regulations are effective from today. These are available at www.mca.gov.in and www.ibbi.gov.in.

Replacement of liquidator allowed in voluntary liquidation by members' or contributories' resolution, enabling appointment of another insolvency professional. The amendment permits replacement of the liquidator in a voluntary liquidation: a corporate person that initiated voluntary liquidation may, by a resolution of members, partners, or contributories as applicable, appoint another insolvency professional to act as liquidator in place of the incumbent; the initiation condition that the corporate person have no debt or be able to pay debts in full is preserved and the amendment is effective immediately.