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CS Professional · Corporate Restructuring, Valuation and Insolvency · Voluntary Liquidation

Zenith Polymers Ltd, a debt-free company, wants to liquidate voluntarily. Its members have passed a special resolution in general meeting requiring voluntary liquidation. Under the IBC provisions on voluntary liquidation, what else must that resolution do?

The resolution passed by the members must also appoint an insolvency professional to act as liquidator. The IBC requires the same special resolution that orders voluntary liquidation to name the liquidator, so neither the Registrar nor the Tribunal chooses at this stage.

  1. AAppoint an insolvency professional to act as the liquidatorCorrect
  2. BAppoint the company's statutory auditor as liquidator
  3. CLeave the choice of liquidator to the Registrar of Companies
  4. DLeave the choice of liquidator to the Adjudicating Authority

Explanation

The special resolution under the voluntary liquidation provision must both require the company to be liquidated voluntarily and appoint an insolvency professional to act as the liquidator. The members, not the Registrar or the Adjudicating Authority, make the appointment at this stage. An auditor is not eligible unless he is an insolvency professional.

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