FAQs on Liquidation & Voluntary Liquidation Forms

FAQs on Liquidation and Voluntary Liquidation Forms (As on 10.01.2025)

1. What are the key responsibilities of Insolvency Professionals when filing Liquidation and Voluntary Liquidation forms?

   • Ensure accurate completion of all relevant fields.
   • Submit comprehensive details and all required documents.
   • File only one LIQ-1, LIQ-3, LIQ-4, VL-1, VL-3, and VL-4 per Corporate Debtor (CD).

2. What documents need to be attached with LIQ-1?

   • List of documents received from the Resolution Professional as an undertaking (including cases where the Resolution Professional continues as the Liquidator).
   • Public Announcement and Liquidation Order.

3. How should valuation reports be attached in LIQ-2?

   • For fresh valuations: Attach under “Other Relevant Documents.”
   • In case no fresh valuations: Attach the previous valuation report under the same category.
   • The liquidation value in LIQ-2 must match the attached valuation report.

4. What is the sequential order for filing Liquidation forms ?

   • LIQ forms must be filed in order: LIQ-1, LIQ-2, LIQ-3, LIQ-4.

5. What details are mandatory in LIQ-3?

   • Point G: Amount realized during liquidation.
   • The Point H: Distribution under Section 53.
   • Point I: Security interest details not relinquished under Section 52.
   • Total realization must match total distribution under Section 53 (including corporate insolvency resolution process cost, liquidation cost, and liquidator fees).

6. What must be checked while filing VL-1?

   • Correctly specify the Liquidation Commencement Date based on the date of the Special Resolution or Extraordinary General Meeting.

7. Is it mandatory to report SCC meeting details in LIQ-2?

   • Yes, details of SCC meetings (Point 7) must be completed and documents uploaded under “Other Relevant Documents.”

8. What happens if IPs fail to comply with guidelines?

   • Non-compliance will result in the rejection of the Authorization for Assignment application.

9. Are forms required for stayed cases?

   • Yes, forms must still be filed to maintain proper documentation and compliance.

10. What forms are required for cancelled/withdrawal cases?

    • File LIQ-1 and LIQ-2 (select ‘Cancelled’ in LIQ-2). Other fields in LIQ-2 are optional and can be completed if information is available.
    • LIQ-3 is not mandatory; proceed directly to LIQ-4, selecting the “Cancelled” option.

11. What forms need to be filed if the final report was submitted before 28.06.2024?

    • File LIQ-1, LIQ-2 for the last quarter of the progress report, and LIQ-3.

12. What forms need to be filed if the process closed or the CD was dissolved before 28.06.2024?

    • File LIQ-1, LIQ-2 for the last quarter, LIQ-3, and LIQ-4.

13. Do I need to file LIQ-2 for all ongoing quarters?

    • No, only file LIQ-2 starting from March 2024 onward.

14. Who is responsible for filing forms if a liquidator is replaced?

    • Filing responsibility lies with:
      • Current liquidator, or
      • The last liquidator handling the process.

For details related to FAQs on Liquidation and Voluntary Liquidation Forms issued by IBBI, please visit the link 

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