Voluntary Liquidation of Companies

The e-filling status of the Company, on successful filing of Form GNL-2 and Form MGT-14, is changed to ‘Under Liquidation’. It should be pursued with office of concerned Registrar for change in status.

However, in practice that hard copies are insisted by Registrar’s office for the attachments to the said Forms i.e., Hard Copy of Declaration of Solvency executed by all the Directors, the Board and Special Resolution passed for approval of VL and appointment of Liquidator, Creditors Approval, if any, Public Announcement in Form A and any other document as may be deemed necessary.

Once the hard copies are taken on record by the ROC, the status of the Company is changed to ‘Under Liquidation’ and thereafter the Company is not required / cannot file any e-forms except GNL Forms, if required.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 4(b) (Syllabus 2017).

To the Existing Bank: For not to accept any debit instruction signed by any previous signatory and to give effect to the change in signatories of the Bank from the previous signatory to the Liquidator or a person so authorized by him / her. Once a new account for Liquidation is opened, a request be sent for closure of existing bank account.

It is recommended to have clear instructions in the closure letter regarding change of existing signatories to the Liquidation and thereafter transfer of funds from existing bank account to the new bank account.

To the IBBI: Publication on the IBBI website in Form A of IBBI (Voluntary Liquidation Process)

Regulations, 2017) i.e Public Announcement for disclosure of commencement of liquidation and appointment of liquidator.

To the Income Tax Department: Pursuant to Section 178 of the IT Act, the Liquidator has to intimate the IT Department about his appointment. Thereafter, the Department will raise demands, if any and issue a ‘No Objection Certificate’ within a time window of 3 months.

Company cannot part away with its assets until this NOC is received from the IT Department.

To the ROC: Intimation of appointment of Liquidator in Form MGT 14; Intimation of commencement of Liquidation along with executed Declaration of Solvency in Form GNL-2.

To GST Department/Ward: Pursuant to Section 88 of the CGST Act, and Intimation is to be submitted with the jurisdictional GST Department with respect to appointment of Liquidator within 30 days of his appointment. The Departments can require provision of debt certificate from the Company and status of GST Returns, in order to ascertain the GST Liability and calculation of GST Refund, if any.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 4(d) (Syllabus 2017).

For the purposes of liquidation, the liquidator forms an estate of the assets and holds the liquidation estate as a fiduciary for the benefit of all the creditors. The liquidation estate assets include the contractual rights of the Company as well.

If any contractual liability is there, it needs to be exited either before commencement of liquidation by the then management of the company and such liability shall be made as part of Declaration of Solvency (DoS). If there is a requirement of goods or services under such contract during the liquidation for the beneficial liquidation, the liability for such future payments should also be covered under DoS. All other contracts come to end on commencement of liquidation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 4(c) (Syllabus 2017).

As per Regulation 20 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, the existence of a security interest may be proved by a secured creditor on the basis of:

(a)the records available in an information utility;

(b)certificate of registration of charge issued by the Registrar of Companies;

(c)proof of registration of charge with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India; or

(d)other relevant documents which adequately establish the security interest.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2026, Q. 2(e) (Syllabus 2022).

In the given case the Company has secured as well as unsecured Creditors. Assuming that the Creditors gives approval, the Voluntary liquidation has to be completed with 270 days from the commencement as per amended Regulations. (Regulation 37 of the IBBI (Voluntary Liquidation)

Regulations, 2017, dealing with completion of liquidation states that (1) the liquidator shall endeavour to complete the liquidation process of the corporate person and submit the Final Report under regulation 38 within: - (a) two hundred and seventy days from the liquidation commencement date where the creditors have approved the resolution under clause (c) of subsection (3) of section 59 or clause (c) of sub-regulation (1) of regulation 3.)

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(iii) (Syllabus 2017).

If the Corporate Debtor does not have any Creditors, then the Voluntary liquidation has to be completed within 90 days from the commencement as per the amended regulations. (According to the Regulation 37 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, (1) The liquidator shall endeavour to complete the liquidation process of the corporate person and submit the Final Report under regulation 38 within (b) ninety days from the liquidation commencement date in all other cases not covered by (a)}

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(iv) (Syllabus 2017).

As per Regulation 4 of IBBI (Voluntary Liquidation) Regulations, 2017 the corporate person shall from the liquidation commencement date cease to carry on its business except as far as required for the beneficial winding up of its business. Accordingly, the Company shall not carry-on business after commencement of Voluntary Liquidation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(i) (Syllabus 2017).

As per Regulation 41 of the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) Regulations, 2017, the liquidator shall preserve a physical or an electronic copy of the reports, registers and books of account referred to in regulations 8 and 10 for at least eight years after the dissolution of the corporate person, either with himself or with an information utility and (b)

a physical copy of records for a minimum period of three years; from the date of dissolution of the corporate person, before the Board, the Adjudicating Authority, Appellate Authority or any Court, whichever is later.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(vi) (Syllabus 2017).

As per the Insolvency and Bankruptcy Code, 2016 and Liquidation Regulations, the Liquidator shall not be related to the corporate person which includes relative of director and hence, brother of Director cannot be appointed as Liquidator. (Regulation 6 of the IBBI (Voluntary Liquidation Process) Regulations, 2017, (1) An insolvency professional shall be eligible to be appointed as a liquidator if he, Explanation: (b) is not a related party of the corporate person; Section5 (24) of the Code defines “related party”, in relation to a corporate debtor, means- (a) a director or partner of the corporate debtor or a relative of a director or partner of the corporate debtor;)

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(v) (Syllabus 2017).

As per Regulation 16, 17, 18 & 19 of IBBI (Voluntary Liquidation Process) Regulations, 2017, the modes of submission of proof of claim to the liquidator by various stakeholders of the corporate debtor in voluntary liquidation, along with the forms prescribed therein are as follows:

1.A person claiming to be an operational creditor of the corporate person, other than a workman or employee, shall submit proof of claim to the liquidator in person, by post or by electronic means in Form B of Schedule I. (Regulation 16)

2.A person claiming to be a financial creditor of the corporate person shall submit proof of claim to the liquidator in electronic means in Form C of Schedule I. (Regulation 17)

3.A person claiming to be a workman or an employee of the corporate person shall submit proof of claim to the liquidator in person, by post or by electronic means in Form D of Schedule I. (Regulation 18)

4.A person, claiming to be a stakeholder other than those as mentioned above, shall submit proof of claim to the liquidator in person, by post or by electronic means in Form D of Schedule I. (Regulation 19)

Thus, we can say that the mode of submission of proof of claims to the liquidator by the financial creditors are not in line with the provisions of the IBC, Code. 2016.

The Financial Creditors have to file their claim by electronic mode only.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 2(b)(i) (Syllabus 2022).

IBBI notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process)

(Amendment) Regulations, 2024. As per Regulation 37 of the IBBI (Voluntary Liquidation Process)

Regulations,2017 previously provided that if the liquidation process continues for more than 90 days when there is no claims and 270 days in case of claims from Creditors, the liquidator shall hold a meeting of the corporate person’s contributories and present the status report of the liquidation process.

However, with the Amendment Regulations, the timeline has been amended to provide that if the liquidation process continues beyond 90 (Ninety) days or 270 (Two Hundred and Seventy) days from the Liquidation Commencement Date where creditors have approved the resolution and 90 (ninety) days from the liquidation commencement date in other cases then, the liquidator shall:

a)Hold a meeting of the contributories of the corporate person within 15 (Fifteen) days from the end of 270 (two hundred and seventy) days or 90 (Ninety) days, as the case maybe and thereafter, periodically, at the end of every such succeeding period till submission of application for dissolution of the Corporate Person; and

b)Present a status report highlighting the liquidation progress and the reasons for non-completion of the process within the stipulated and the required additional time period for completion of the process.

The Status Report shall enclose the audited accounts of the liquidation showing the receipts and payments pertaining to liquidation since the liquidation commencement date.

The Amendment Regulations has further inserted Regulation 37(4) which provides that the Liquidator shall file the Status Report with IBBI within 7 (seven) days of the meeting of contributories.

Thus, in view of the above provisions, the requirement of meeting with shareholders comes only upon completion of twelve months from liquidation commencement date, and the fact that now the management of the Company rests in the hands of the liquidator and no decisions are to be taken by the shareholders with respect to the company or for approval of accounts, it is understood that the requirement to hold an Annual General Meeting of the Company is no longer applicable to the Company.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 4(a) (Syllabus 2017).

As per Regulation 40 of IBBI (Voluntary Liquidation Process) Regulations, 2017, where the liquidator is of the opinion that the corporate person will not be able to pay its debts in full from the proceeds of assets to be sold in voluntary liquidation, he shall make an application to the Adjudicating Authority to suspend the process of voluntary liquidation and pass any such orders as it deems fit.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2024, Q. 2(b)(ii) (Syllabus 2022).

Rule 161 of the National Company law Tribunal Rule, 2013 deals with filing of Order of the Tribunal with the Registrar of Companies. It provides that:

The certified copy of the order passed by the Tribunal shall be filed by the company in form INC-28 along with fee of Rupees five hundred with the Registrar of Companies within the time specified in the Act or specified by the Tribunal. Where no time limit is prescribed by the Tribunal, such order shall be filed within thirty days from the date of receipt of certified copy of the order.

Upon approval of INC-28 by the Registrar the MCA Master data status of the Company will be changed to ‘dissolved’, which is the final status after Voluntary Liquidation.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 3(a)(v) (Syllabus 2022).

Section 59(1) of the Insolvency and Bankruptcy Code, 2016 provides that a corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of Chapter V.

Regulation 39 of IBBI (Voluntary Liquidation Process) Regulations, 2017 deals with the provisions relating to the unclaimed proceeds of liquidation or undistributed assets.

The Board shall operate and maintain an Account to be called the Corporate Voluntary Liquidation Account in the Public Accounts of India.

A liquidator shall deposit the amount of unclaimed dividends, if any, and undistributed proceeds, if any, in a liquidation process along with any income earned thereon till the date of deposit, into the Corporate Voluntary Liquidation Account before he submits an application under sub-section

(7)of section 59.

A liquidator, who holds any amount of unclaimed dividends or undistributed proceeds in a liquidation process, shall deposit the same within fifteen days of the date of such commencement, along with any income earned thereon till the date of deposit.

A liquidator, who fails to deposit any amount into the Corporate Voluntary Liquidation Account under this regulation, shall deposit the same along with interest thereon at the rate of twelve percent per annum from the due date of deposit till the date of deposit.

A liquidator shall submit to the authority with which the corporate person is registered and the Board, the evidence of deposit of the amount into the Corporate Voluntary Liquidation Account under this regulation, and a statement in Form G setting forth the nature of the amount deposited into the Corporate Voluntary Liquidation Account, and the names and last known addresses of the stakeholders entitled to receive the unclaimed dividends or undistributed proceeds.

The liquidator shall be entitled to a receipt from the Board for any amount deposited into the Corporate Voluntary Liquidation Account, Under this Regulation.

Prior to dissolution of the corporate persons, a stakeholder, who claims to be entitled to any amount deposited into the Corporate Voluntary Liquidation Account, may apply to the liquidator in Form - I for withdrawal of the amount.

On receipt of request under sub-regulation (7), the liquidator after verification of the claim, shall request the Board for release of amount to him for onward distribution.

Board on receipt of request may release the amount to the liquidator.

The liquidator, shall, after making the distribution to the stakeholder shall intimate the Adjudication Authority of such distribution.

After dissolution of the corporate person, a stakeholder, who claims to be entitled to any amount deposited into the Corporate Voluntary Liquidation Account, may apply to the Board in Form – I for an order for withdrawal of the amount.

If any other person other than the shareholder claims to be entitled to any amount depsited to the Corporate Voluntary Liquidation Account, he shall submit evidence to satisfy the liquidator or the Board, as the case may be, that he is so entitled.

The Board may, if satisfied that the stakeholder or any other person is entitled to withdraw of any amount from the Corporation Voluntary Liquidation Account, make an order for the same in favour of that stakeholder or that other person.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2025, Q. 3(c) (Syllabus 2022).

Amount available for distribution to Shareholders

Amount realised - Only Cash and Bank Balances Rs.94,48,300 Less:

Liquidation Fees Rs. 11,62,000 Less:

Other Expenses (considered as all approved Rs. 2,86,300 expenses)

Balance amount available for distribution Rs. 80,00,000

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 3(a)(i) (Syllabus 2022).

No. of Amount Percentage Shares held available to of amount

each individual distributed shareholder(Rs) to each

shareholder

Tessilis Technology, Italy 15,80,000 63,20,000 79% P Dave 2,00,000 8,00,000 10% Shah 2,00,000 8,00,000 10% Girija Kapadia 20,000 80,000 1% Total number of equity shares of Rs.10 each 20,00,000 80,00,000 100% fully paid up

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 3(a)(ii) (Syllabus 2022).

On commencement of Voluntary Liquidation, Special Resolution passed by Shareholders for approval Voluntary Liquidation have to be filed with Registrar through Form MGT-14 within 7 days of passing of resolution along with Declaration of Solvency and other declarations in Form GNL-2 within 7 days.

Upon approval of these Form MCA Master data status will be changed to ‘Under Liquidation’.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 3(a)(iii) (Syllabus 2022).

On commencement of Voluntary Liquidation, the Status of the Company will be changed to ‘Under Liquidation’ and the Board Directors shall not have any power. Further, the Shareholders of the Company becomes contributories. Hence, there is no need to file Annual Forms after the commencement of the Voluntary Liquidation.

Instead, the liquidator is responsible for submitting reports, including the Annual Status Report, to track the progress of the liquidation. Once the winding up process is complete, the liquidator files the final report and seeks dissolution, according to the Insolvency and Bankruptcy Board of India (IBBI).

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2025, Q. 3(a)(iv) (Syllabus 2022).

Contention of the legal consultant that the company cannot evaluate voluntary liquidation just to save cost and time involved in ensuring compliances irrespective of the fact that presently the company doesn't have any business, is not correct. This can be explained through a decided case in the matter of Nippei Toyoma India Private limited.

The petition was filed by Nippei Toyoma India Private limited to initiate voluntary liquidation proceedings under Section 59 of Insolvency and Bankruptcy Code. 2016 (IBC) before NCLT, Mumbai Bench.

The facts of the case are as under:

The Company was incorporated under the provisions of Companies Act, 1956 on 27th April, 2007. It was engaged in the business of providing engineering services and trading of automotive components for automotive industries. The Company does not have any operations and not carrying on any business activities.

Considering the cost and time involved in ensuring compliances regarding the Company, the members of the Company in their Extra Ordinary General Meeting held on 28th September, 2017 resolved to voluntary liquidate the Company. The directors of the Company declared on affidavit dated 27th September, 2017 that they have made full inquiry into the affairs of the Company, and are of the opinion that the Company has no debts/will be able to pay its debt in full from the proceeds of assets to be sold in the voluntary liquidation and that it is not being wound-up to defraud any person. The directors have appended to the aforesaid affidavit, audited financial statements and record of business operations of the company of previous two financial years viz. year ending on 31st March, 2016 and 31" March, 2017. The statement of payment to stakeholders, annexed to the petition, detailed the payment made to various stakeholders and Dividend Distribution Tax. Post the aforementioned payment, the accumulated profit of Rs.53,06,973/- as dividend and investment in share capital of Rs.1,00,00,000/- were paid to the members of the company thereby the assets of the company were fully liquidated. The Independent Auditor certified that during the liquidation period 28th September, 2017 to 23rd July, 2018 the proper books of accounts were kept and the said financial statements comply with the accounting standards under section 133 of Companies Act 2013.

Further, it certified that there is no pending litigation involving the Company, there are no long-term contracts with the Company for which there may be any foreseeable losses and there is no amount which is to be transferred to the Investor Education and Protection Fund by the Company. The copy of the final report of the Liquidator dated 12th September, 2018 was annexed to the petition, stating how the liquidation process has been conducted from 28th September, 2017 to 12th September, 2018, that all the assets of the Company have been discharged to the satisfaction of the creditors and that no litigation is pending against the company. The said Final report of the liquidator was submitted with the registrar of Companies vide Form GNL-2 dated 13th September, 2018. The Liquidator had filed this petition before the Tribunal under section 59(7) of the Code seeking order of dissolution of the Company. NCLT noted that on examining the submission made by the counsel appearing for the petitioner and the documents annexed to the petition, it appears that the affairs of the company have been completely wound- up, and its assets completely liquidated. NCLT in view of the above facts and circumstances and Final report of the liquidator directed that the Company shall be dissolved from the date of its order. The Petitioner was further directed to serve a copy of the order upon the registrar of Companies, with which the Company is registered, within fourteen days of receipt of the order.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2023, Q. 6(b) (Syllabus 2017).

Section 59 (1) of the Insolvency and Bankruptcy Code, 2016 provides that a corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings.

Conditions for voluntary liquidation proceedings:

Section 59(3) of the Insolvency and Bankruptcy Code, 2016 provides that voluntary liquidation proceedings of a corporate person registered as a company shall meet the following conditions:

a.A declaration from majority of the directors of the company verified by an affidavit stating that-i. they have made a full inquiry into the affairs of the company and they have formed an opinion that either the company has no debt or that it will be able to pay its debts in full from the proceeds of assets to be sold in the voluntary liquidation; and ii. the company is not being liquidated to defraud any person; b. The declaration under sub-clause (a) shall be accompanied with the following documents:

i.audited financial statements and record of business operations of the company for the previous two years or for the period since its incorporation, whichever is later; ii. a report of the valuation of the assets of the company, if any prepared by a registered valuer; c. Within four weeks of a declaration under sub-clause (a), there shall be – i. a special resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily and appointing an insolvency professional to act as the liquidator; or ii. a resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company shall be dissolved, as the case may be and appointing an insolvency professional to act as the liquidator:

The proviso appended to sub-section (3) of section 59 lays down that if the company owes any debt to any person, creditors representing two thirds in value of the debt of the company shall approve the resolution passed under sub-clause (c) within seven days of such resolution.

Thus, as per section 59(1) & (3) voluntary liquidation could only be done if corporate debtor discharged its debts to satisfaction of creditors and if there was no litigation pending against corporate debtor. In the instant case since both these ingredients are not satisfied, hence the option for voluntary liquidation of the company could not be advised.

The company could take steps to have recourse under section 271 of the Companies Act, 2013 or could take steps for compulsory liquidation by filing an application under section 10 of the Insolvency and Bankruptcy Code, 2016.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2021, Q. 5(a) (Syllabus 2017).

Date of EGM 1st July 2021

(i)Voluntary Liquidation Commencement date - Date of EGM will be treated as Liquidation Commencement date - 1st July 2021

(ii)Date of Public Announcement - Within 5 days from the date of Commencement-6th July, 2021

(iii)Intimation of Resolution to IBBI and RoC - Within 7 days from the date of Commencement- 8th July 2021

(iv)Receipt of claims and preparing list of Stakeholders - 30 days from the date of Commencement - 31st July 2021

(v)Submission of Preliminary Report - Within 45 days from Commencement date-15th August, 2021

(vi)Distribution of Assets - Within six months from the receipt of amount to stakeholders.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2021, Q. 5(a) (Syllabus 2017).

Voluntary Liquidation of Corporate Persons Section 59(3) of the Insolvency and Bankruptcy Code, 2016 provides that voluntary liquidation proceedings of a corporate person registered as a company shall meet the following conditions:

(a)A declaration from majority of the directors of the company verified by an affidavit stating that (i) they have made a full inquiry into the affairs of the company and they have formed an opinion that either the company has no debt or that it will be able to pay its debts in full from the proceeds of assets to be sold in the voluntary liquidation; and (ii) the company is not being liquidated to defraud any person;

(b)The declaration under sub-clause (a) shall be accompanied with the following documents: (i) audited financial statements and record of business operations of the company for the previous two years or for the period since its incorporation, whichever is later; (ii) a report of the valuation of the assets of the company, if any prepared by a registered valuer;

(c)Within four weeks of a declaration under sub-clause (a), there shall be - (i) a special resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily and appointing an insolvency professional to act as the liquidator; or (ii) a resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company shall be dissolved, as the case may be and appointing an insolvency professional to act as the liquidator.

The proviso appended to sub-section (3) of section 59 lays down that if the company owes any debt to any person, creditors representing two thirds in value of the debt of the company shall approve the resolution passed under sub-clause (c) within seven days of such resolution.

Thus, as per section 59(3) voluntary liquidation could only be undertaken if corporate debtor discharged its debts to satisfaction of creditors and if there was no litigation pending against corporate debtor. In the instant case since both these ingredients are not satisfied, hence the option for voluntary liquidation of the company could not be advised.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, June 2019, Q. 3(a) (Syllabus 2017).

Section 59(1) of the Insolvency and Bankruptcy Code, 2016 provides that a corporate person who intends to liquidate itself voluntarily and has not committed any default may initiate voluntary liquidation proceedings under the provisions of the Code.

A corporate person registered as a company has to meet the following conditions to initiate a Voluntary Liquidation Process:

(a)A declaration from the majority of the directors of the company verified by an affidavit stating they have conducted a full inquiry into the affairs of the company and have formed an opinion that either the company has no debts or that it will be able to pay its debts in full from the proceeds of assets to be sold in the Voluntary Liquidation; and

(b)That the company is not being liquidated to defraud any person.

In this case it is stated that some of the directors signed the declaration and it is not coming out clearly that the directors who signed were in the majority. Moreover, the declaration relating to fraud is not there. Therefore, in this scenario, XYZ Ltd. cannot initiate Voluntary Liquidation proceedings in accordance with the Code.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2(a)(i) (Syllabus 2017).

The proviso appended to section 59(3) of the Insolvency and Bankruptcy Code, 2016 lays down that if the company owes any debt to any person, creditors representing two thirds in value of the debt of the company shall approve the resolution passed under sub-clause

(c)within seven days of such resolution.

Accordingly, prior approval of Creditors is not required; however, the approval has to be obtained within 7 days of passing the Shareholders resolution.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2024, Q. 5(b)(ii) (Syllabus 2017).

As per section 59(3)(b) of the Code, the declaration shall be accompanied with the following documents:

(a)Audited Financial Statements and a record of business operations of the company for the previous two years or for the period since its incorporation, whichever is later.

(b)A report of the valuation of the assets of the company, if any, prepared by a registered valuer.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2(a)(ii) (Syllabus 2017).

If the articles of the company fixed the period of duration of continuation of the company and that period expires, XYZ Ltd. under section 59(3)(c)(ii) of the Code shall pass a resolution of the members of the company in a general meeting requiring the company to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its articles or on the occurrence of any event in respect of which the articles provide that the company shall be dissolved, as the case may be and appointing an insolvency professional to act as the liquidator.

Source⁠​‌​‌‌​‌​⁠: ICSI Guideline Answers, December 2019, Q. 2(a)(iii) (Syllabus 2017).