Mumbai: Voluntary liquidation is rapidly emerging as the preferred route for company promoters seeking to wind down operations, rather than prolonging unviable businesses and absorbing mounting losses alongside compliance costs. Since the inception of the Insolvency and Bankruptcy Code (IBC), about 2,417 companies initiated voluntary liquidation, of which final reports have been submitted in 1,867 cases as of September-end.
Section 59 of the IBC covers voluntary liquidation, allowing solvent companies that have completed their purpose or become unviable to wind up, sell assets and distribute capital to shareholders, unlike insolvency proceedings that apply only in cases of default.
Reasons for Liquidation
Animesh Bisht, partner at Cyril…