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CS Professional · Insolvency and Bankruptcy - Law and Practice · Liquidation of Corporate Person

Sundaram Textiles Ltd is in liquidation under Chapter III of the IBC. The liquidator has sold all its assets, distributed the proceeds and prepared the account of the liquidation. Which step should the liquidator take next to bring the corporate debtor's existence to an end?

The liquidator should apply to the Adjudicating Authority for dissolution once the assets are completely liquidated. Section 54 of the Code places this power with the Adjudicating Authority, not the Registrar, the members or the Board, so the application goes to the Tribunal.

  1. AApply to the Adjudicating Authority for dissolution of the corporate debtorCorrect
  2. BApply to the Registrar of Companies for striking off the company's name
  3. CObtain a resolution of the members approving dissolution
  4. DWait for the Insolvency and Bankruptcy Board to pass a dissolution order

Explanation

Under section 54, where the assets of the corporate debtor have been completely liquidated, the liquidator makes an application to the Adjudicating Authority for dissolution. The Registrar does not dissolve the company, and no member resolution or Board order is required. The Adjudicating Authority orders dissolution.

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