Question: My family in India has a private limited company which has built up substantial reserves. The family members want to take their share of the reserves and they do not wish to continue with business operations. Liquidation is therefore one of the main options. Can this be done expeditiously?
ANSWER: Section 59 of the Insolvency & Bankruptcy Code (IBC) permits voluntary liquidation whereby solvent companies like yours can sell assets and distribute capital to shareholders together with the built up surpluses. Under this legal provision, shareholders are able to wind up the company through a supervised process thereby creating a credible record of a legally compliant exit. This brings funds back into the hands of shareholders…