Ayushi Khetan, Jindal Global Law School, Sonepat, Haryana
ABSTRACT
The process of winding up one’s own company has seemingly been expedited with the enactment of the The Insolvency and Bankruptcy Code in 2016. Where the process was initially governed by the Companies Act of 2013, the process was a rather lengthy one, owing to the process being governed by multiple sections of law. With the enactment of the IBC, companies can proceed towards winding up by referring to a single section.
This paper starts with a brief history of the evolution of winding up proceedings, stating the different types of winding up processes in detail, as provided under the old Companies Act of 1956. It also marks the difference in winding up proceedings and regulations under the Companies Act of 1956 and of 2013. It further goes on to explain how the provisions of voluntary liquidation came into existence, through the BLRC and the IBC. As per the terms of Section 59, the most relevant provision for voluntary liquidation, a company who intends to liquidate itself voluntarily and has not committed a default on any debt, may initiate voluntary liquidation proceedings. The paper analyses the scope of ‘debt’ here, whether it refers to present debt or past debt. The paper continues to explain the several underlying conditions which must be satisfied before applying to voluntary liquidation, the process to be followed before and during voluntary liquidation. While providing the author’s analysis and recommendations, the paper ends on a comparative note with the process of voluntary liquidation in Australia.
