These forms will boost the efficiency of voluntary liquidations, allowing liquidators to submit forms online and reducing the chances of errors.
To ease the compliance burden for insolvency professionals, and enhance the effectiveness of the liquidation process, the IBBI has launched a set of electronic forms under the Insolvency and Bankruptcy Code.
These forms are crucial for the liquidation process under the Insolvency and Bankruptcy Code (IBC), as they facilitate systematic and transparent record-keeping and seamless reporting, the insolvency regulator said.
The new circular, issued by the Insolvency and Bankruptcy Board of India (IBBI) on June 28, introduces forms LIQ 1 to LIQ 4, covering different stages of the liquidation process.
Presently, the IPs submit the details regarding the liquidation process, to the board through emails, which is time-consuming and inefficient, the IBBI said in the circular.
Types of Forms:
- LIQ 1: Notice of Commencement of Liquidation: This form marks the beginning of the liquidation process and needs to be filed by the Liquidator upon receiving the order from the Adjudicating Authority.
- LIQ 2: Progress Report on Liquidation: This is a periodic report filed by the Liquidator, typically quarterly, detailing the progress made in asset realization, creditor claims received, and expenses incurred.
- LIQ 3: Statement of Accounts: This form provides a detailed financial picture of the liquidation process, including the total value of assets realized, claims received and verified, and the distribution plan for stakeholders.
- LIQ 4: Application for Dissolution of Corporate Debtor: Once all assets are liquidated and claims are settled, the Liquidator uses this form to formally request the Adjudicating Authority to dissolve the company.
Additional Points:
- Voluntary Liquidation: Separate forms (VL 1 to VL 4) exist for voluntary liquidation processes initiated by the company itself.
- Deadline for Existing Cases: While the specific deadline may change, IBBI has set timelines for ongoing liquidation cases to transition to the new electronic filing system.
- IBBI Website: The Insolvency and Bankruptcy Board of India’s website (https://www.ibbi.gov.in/) likely contains more information on the specific content and filing procedures for these forms.
Potential Advantages:
- Faster Processing: Electronic submissions could lead to quicker turnaround times for approvals and clearances.
- Transparency for Stakeholders: Online access to forms and progress reports might improve transparency for creditors, shareholders, and other parties involved.
- Data Analysis and Reporting: The digital format allows for easier data collection and analysis, potentially leading to improved monitoring and policy development by IBBI.
These forms will boost the efficiency of voluntary liquidations, allowing liquidators to submit forms online and reducing the chances of errors.
The insolvency regulator directed that IPs handling ongoing cases must file the required forms by September 30..
This includes cases where no application for dissolution has been filed, cases with a dissolution application, and cases where the voluntary liquidation process has commenced.
It is clarified that IPs who do not comply with new norms of the Code and the regulations, will be liable as per the IBC provisions, the regulator said.