VL of CPs (Sec. 59)

“(1) A corporate person who intends to liquidate itself voluntarily and has not
committed any default may initiate voluntary liquidation proceedings under the provisions
of this Chapter.
(2) The voluntary liquidation of a corporate person under sub-section (1) shall meet
such conditions and procedural requirements as may be specified by the Board.
(3) Without prejudice to sub-section (2), voluntary liquidation proceedings of a
corporate person registered as a company shall meet the following conditions, namely: –
(a) a declaration from majority of the directors of the company verified by an
affidavit stating that –
(i) they have made a full inquiry into the affairs of the company and they
have formed an opinion that either the company has no debt or that it will be able
to pay its debts in full from the proceeds of assets to be sold in the voluntary
liquidation; and
(ii) the company is not being liquidated to defraud any person;
(b) the declaration under sub-clause (a) shall be accompanied with the following
documents, namely: –
(i) audited financial statements and record of business operations of the
company for the previous two years or for the period since its incorporation,
whichever is later;
(ii) a report of the valuation of the assets of the company, if any prepared by a registered valuer;
(c) within four weeks of a declaration under sub-clause (a), there shall be –
(i) a special resolution of the members of the company in a general meeting
requiring the company to be liquidated voluntarily and appointing an insolvency
professional to act as the liquidator; or
(ii) a resolution of the members of the company in a general meeting
requiring the company to be liquidated voluntarily as a result of expiry of the period
of its duration, if any, fixed by its articles or on the occurrence of any event in
respect of which the articles provide that the company shall be dissolved, as the
case may be and appointing an insolvency professional to act as the liquidator:
Provided that the company owes any debt to any person, creditors representing twothirds in value of the debt of the company shall approve the resolution passed under subclause (c) within seven days of such resolution.
(4) The company shall notify the Registrar of Companies and the Board about the
resolution under sub-section (3) to liquidate the company within seven days of such
resolution or the subsequent approval by the creditors, as the case may be.
(5) Subject to approval of the creditors under sub-section (3), the voluntary liquidation
proceedings in respect of a company shall be deemed to have commenced from the date of
passing of the resolution under sub-clause (c) of sub-section (3).
(6) The provisions of sections 35 to 53 of Chapter III and Chapter VII shall apply to
voluntary liquidation proceedings for corporate persons with such modifications as may be
necessary.
(7) Where the affairs of the corporate person have been completely wound up, and its
assets completely liquidated, the liquidator shall make an application to the Adjudicating
Authority for the dissolution of such corporate person.
(8) The Adjudicating Authority shall on an application filed by the liquidator under
sub-section (7), pass an order that the corporate debtor shall be dissolved from the date of
that order and the corporate debtor shall be dissolved accordingly.
(9) A copy of an order under sub-section (8) shall within fourteen days from the
date of such order, be forwarded to the authority with which the corporate person is
registered” VL Note : –