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CS Professional · Insolvency and Bankruptcy - Law and Practice · Voluntary Liquidation of Companies

Sunrise Textiles Pvt Ltd has no default and its directors have filed a declaration with an affidavit under the voluntary liquidation provisions. The company owes no debt to anyone. Within what period from the declaration must the members pass the special resolution requiring voluntary liquidation and appointing an insolvency professional as liquidator?

The special resolution must be passed within four weeks of the directors' declaration. Section 59(3)(c) fixes this window for the general meeting to resolve on voluntary liquidation and appoint an insolvency professional as liquidator. The seven-day period relates to creditor approval and notifications, not to the members' resolution.

  1. AWithin seven days of the declaration
  2. BWithin four weeks of the declarationCorrect
  3. CWithin thirty days of the declaration
  4. DWithin ninety days of the declaration

Explanation

Section 59(3)(c) requires the members' resolution within four weeks of the directors' declaration. Seven days is the period for creditor approval and for notifying the Registrar and the Board, so it is the wrong period here.

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