The economic study stresses the need to simplify the voluntary liquidation process

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A portal that combines all stages of the liquidation process, from application by companies to processing by all departments, will prove very useful, he added.

A portal that combines all stages of the liquidation process, from application by companies to processing by all departments, will prove very useful, he added.

The 2021-22 economic study highlighted the need for a simplified procedure for the voluntary liquidation of companies. “There is a need to simplify the problems of the voluntary liquidation process, in order to improve the ease of exit of companies”, indicates the study.

“In addition to simplifying issues in different stages of processes, there is a need to create a one-stop shop for the whole process,” he added.

A portal that combines all stages of the liquidation process, from application by companies to processing by all departments, will prove very useful, he added.

2022 Economic Survey Updates

Liquidation may be involuntary as in the case of insolvency or bankruptcy; or voluntary which could be due to personal reasons, the subsidiaries being merged. A company can decide to voluntarily close its activity even when it is viable. There has been an overhaul of the insolvency/bankruptcy liquidation process with the introduction of the Insolvency and Bankruptcy Code, 2016 (IBC). be significantly simplified, in addition to recent advances,” the survey said. Currently there are two main methods of voluntary winding up, one through the Registrar of Companies (RoC) under Section 248 of the Companies Act 2013 and the other under the IBC . The former is currently by far the most popular route. Under section 248(2) of the Companies Act, a company may, after paying off all its debts, by special resolution or consent of 75% of the members in terms of paid-up share capital, may file a apply in the prescribed manner to the Registrar of Companies (RoC). There must be no pending litigation against the company and they must follow a 5-step due process, which is cumbersome. Also, companies which have been incorporated to carry out business activities like NBFC, asset management companies, insurance have to get NOC from their regulatory authority like RBI, SEBI, IRDA respectively and it is time consuming.

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