The procedure to be followed for voluntary liquidation proceedings is largely similar to the procedure to be followed for insolvent liquidation. However, there are differences between them. What are such marked differenc

Though the procedure to be followed for voluntary liquidation proceedings under Chapter V Part II of the Insolvency and Bankruptcy Code, 2016 is largely similar to the procedure to be followed for liquidation under Chapter III Part II of the Code yet there are marked differences as mentioned below: To initiate voluntary liquidation proceedings, where the corporate person is registered as a company, the directors have to provide a declaration of solvency and a declaration that the company is not being liquidated to defraud any person. The declarations have to be accompanied by (a) the audited financial statements of the company and (b) a record of its business operations for the previous two years or the period since its incorporation whichever is later. Further, a report of the valuation of the assets of the company prepared by a registered valuer has to be provided. A resolution in favour of the voluntary winding-up of the company and appointment of an insolvency professional as the liquidator has to be passed within four weeks of the declaration under clause (a) of sub-section (3) of section 59 of the Code. Where 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 clause (c) of sub-section (3) of section 59 of the Code within seven days of such resolution.