The government is accelerating voluntary liquidation

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TNN
Mumbai: The government said on Friday it had amended insolvency laws relating to voluntary liquidation to speed up the process. Voluntary liquidation laws are among those aimed at improving the ease of doing business by allowing a smooth exit of companies.
A government statement states that the Insolvency and Bankruptcy of India (Voluntary Winding Up Process) (Amendment) Regulations 2022 was notified on 5th April 2022. The Act was introduced to provide a mechanism for voluntary winding up of a solvent legal person.
“There has been a substantial delay in completing the voluntary liquidation process, although the process, in general, involves negligible creditor claims, fewer assets, if any, to realize and little litigation,” says the press release. Under the terms of the amended laws, the liquidator must establish the list of stakeholders within 15 days against 45 days from the deadline for receipt of claims. This will apply in cases where no claims from creditors have been received.
In addition, the liquidator will distribute the proceeds of realization within 30 days (compared to the previously stipulated six months) from the receipt of the amount to the stakeholders. The new standards prescribe a limit of 270 days for the completion of the liquidation of the company and 90 days from the start date of the liquidation in all other cases.
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