News

January 17, 2020

IBBI makes amendments to liquidation norms


[ by Kavita Krishnan ]

Insolvency-and-Bankruptcy-Code

The Insolvency and Bankruptcy Board of India (IBBI) has notified the Insolvency and Bankruptcy Board of India (Voluntary Liquidation Process) (Amendment) Regulations, 2020 to amend the liquidation norms for corporates.

The amendment which was notified on January 15, 2020, provides that a liquidator should deposit any unclaimed dividends and undistributed proceeds in a liquidation process.

The said amendment provides that 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 into the Corporate Voluntary Liquidation Account before he submits an application for dissolution of the corporate person. It also provides a process for a stakeholder to seek withdrawal from the Corporate Voluntary Liquidation Account.

The changes also provide a process for a stakeholder to seek withdrawal from the Corporate Voluntary Liquidation Account.

As per the Ministry of Corporate Affairs statement, the amended regulations come into effect on January 16, 2020.

As per the amendment, the IBBI shall operate and maintain an account to be called the Corporate Voluntary Liquidation Account in the Public Accounts of India.

“Provided that until the Corporate Voluntary Liquidation Account is operated as part of the Public Accounts of India, the Board shall open a separate bank account with a Scheduled bank for the purposes of this regulation,” it said.

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