InnoTrans Ltd. is seeking to commence a voluntary liquidation process. A declaration on affidavit was provided by one of the company's directors, confirming that a thorough review of the company's financial affairs has b

Section 59 of the Insolvency & Bankruptcy Code, 2016 empowers a corporate person intending to liquidate itself voluntarily, to initiate voluntary liquidation proceedings under the provisions of this Code, if it has not committed any default. Any corporate person registered as a company shall meet the following conditions to initiate a voluntary liquidation process: A declaration from majority of the directors of the company verified by an affidavit stating that: they have made 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 the company is not being liquidated to defraud any person. The declaration shall be accompanied with the following documents, namely: 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 A report of the valuation of the assets of the company, if any, prepared by a registered valuer After making the declaration the corporate debtor shall within four weeks: pass a special resolution at a general meeting requiring that the company should be liquidated voluntarily and appointing insolvency professional to act as the liquidator pass a resolution at a general meeting requiring that the company 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 be dissolved, if any) and appointing an insolvency professional to act as the liquidator. In view of the above-mentioned provisions, a declaration was made on affidavit by only one of the directors of the InnoTrans Ltd., not majority of the directors, which is in contravention of the provisions of the Insolvency & Bankruptcy Code, 2016 as well as affidavit does not include a declaration of solvency.