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New IBBI Forms LIQ 1–4 in Liquidation Reporting

Liquidation Estate under the IBC Code

New IBBI Forms LIQ 1–4 Introduced to Streamline Liquidation Reporting

In the Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, if No resolution plan is received, or The maximum time period expires, and the Adjudicating Authority (AA) may order liquidation of the Corporate Debtor. To strengthen oversight and improve compliance, the Insolvency and Bankruptcy Board of India has introduced four new electronic forms  designed to streamline the liquidation reporting process.

Purpose of Liquidation Reporting form LIQ Forms : 

RP Ensure accurate completion of all fields. Submit comprehensive details and required documents. Only one of each form (LIQ-1, LIQ-3, LIQ-4, VL-1, VL-3, VL-4) should be filed per Corporate Debtor (CD). These forms ensure Efficient reporting from liquidation commencement to dissolution. Timely, accurate, and structured submission of liquidation data, Regulatory compliance by liquidators & electronic filing is mandatory. Timelines are prescribed for each form. Only one form per corporate debtor should be filed for each stage.

Key Responsibilities of IPs While Filing LIQ and VL Forms

Liquidation filling by RP Responsibility & Compliance:

  • The Liquidator (either the existing RP or a new appointee) must ensure Timely and complete submission, Accuracy in data reporting, Attachment of relevant documents. Non-compliance may lead to Rejection of AFA (Authorisation for Assignment) & Regulatory action by IBBI

Documents to Attach While Liquidation Filing LIQ-1 :

  • List of documents received from the Resolution Professional as an undertaking (even if RP continues as Liquidator). and Public Announcement and Liquidation Order.

Liquidation filling must Attaching Valuation Reports in LIQ-2 :

  • Fresh valuation required to be Attach under “Other Relevant Documents”.  and it is to be noted that No fresh valuation required to attach a previous report under the same category. morover liquidation value in LIQ-2 must match the attached valuation report. 

Normal Liquidation Filling Sequential Order for Filing LIQ Forms:

  • RP Must be filed in order: LIQ-1 → LIQ-2 → LIQ-3 → LIQ-4

Liquidation filling mandatory Details in LIQ-3

  • Point G: Amount realized.

  • Point H: Distribution as per Section 53.

  • Point I: Security interest not relinquished under Section 52.

  • Realization from all sources must match total distribution including CIRP cost, liquidation cost, and liquidator’s fee.

Voluntary Liquidation Filing—VL-1 Filing

  • RP must made the critical Check that the correct liquidation commencement date must be based on the special resolution or EGM date.

Liquidation Reporting SCC Meeting Details in LIQ-2 :

  • Yes, mandatory. Fill Point No. 7 and upload related documents under “Other Relevant Documents”.

Consequence of Non-Compliance in Liquidation & Voluntary Liquidation Cases: 

  • Rejection of AFA (Authorisation for Assignment) application if guidelines are not followed.

Liquidation & Voluntary Liquidation Filing Requirement for Stayed Cases :

  • Yes, forms must still be filed to ensure proper documentation.

Liquidation & Voluntary Liquidation Filing Requirement for Cancelled/Withdrawn Cases

  • LIQ-1, LIQ-2 (select ‘Cancelled’) must be filed with available data.

  • LIQ-3 not mandatory.

  • File LIQ-4 (with the ‘cancelled’ status marked).

Liquidation & Voluntary Liquidation Forms for Final Reports Submitted Before 28.06.2024 :

  • The Liquidation File must be completed while filling out the LIQ-1, LIQ-2 (for last reported quarter), and LIQ-3.

Liquidation & Voluntary Liquidation Process Closed / CD Dissolved Before 28.06.2024 :

  • Liquidation File must be completing LIQ-1, LIQ-2 (last quarter), LIQ-3, and LIQ-4.

Liquidation Filing LIQ-2 for Ongoing Processes:

  • It must be to be noted that Only from March 2024 onward. No need to back-file for earlier quarters.

In case of Liquidation Filing Responsibility When Liquidator is Replaced:

  • RP responsibility lies with the current liquidator or the last acting liquidator before replacement.

Our key offerings include:

  • Initiation/Defense of CIRP and liquidation cases
  • Resolution plan drafting and negotiation
  • Legal support to Resolution Professionals
  • Representation before NCLT/NCLAT
  • Compliance, due diligence, and stakeholder coordination

We would be honored if you consider referring clients seeking legal expertise in insolvency proceedings, corporate law compliance, and restructuring. We assure the highest level of professionalism, responsiveness, and legal insight

IBC Services Offered by IFCCL Team

Services to Investors / Bidders / Corporates

  • Drafting of Resolution, Settlement, Repayment & Restructuring Plans

  • Assisting MSMEs in preparing Base Resolution Plans under the Pre-Packaged Insolvency Scheme

  • Viability assessment of Corporate Debtor’s business during CIRP

  • Support in Implementation of Resolution Plans

  • Structuring viable Restructuring Schemes

  • Guidance on provisioning by banks with reference to wilful defaulters

Support Services to Insolvency Professionals (IPs)

  • End-to-end Claims Processing

  • Managing operations of Corporate Debtor during CIRP

  • Conducting Section 29A disqualification verification

  • Preparation of RFRP and Evaluation Matrix

  • Designing Frameworks for Resolution Plans

  • Evaluation of submitted Resolution / Settlement / Repayment Plans

  • Acting as Scrutinizer for E-voting during COC meetings

Independent Advisory Services

  • Advisory on Admissibility of Claims

  • Legal validity of CoC decisions

  • Guidance on powers and duties of directors under CIRP

  • Advisory on Resolution / Settlement / Repayment Plans (including for Personal Guarantors)

  • Preparation of Due Diligence Reports on NPA/SPA accounts for banks

  • Assistance in issuance of notices and filing of applications under Section 95 (Personal Guarantors)

  • Proxy advisory services for Institutional Shareholders

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