Liquidation Reporting: IBBI Rolls Out Revised LIQ Forms

In a move aimed at enabling timely liquidation reporting while significantly reducing the compliance burden on liquidators, the Insolvency and Bankruptcy Board of India (IBBI) has rolled out revised LIQ forms for monitoring the liquidation process.

The LIQ forms are required to be filed in a sequential order, aligned with the process stages from the commencement of liquidation to the dissolution of the corporate debtor or the closure of the liquidation process.

Brief Background

Initially, details regarding the liquidation process were submitted to the Board through emails. Subsequently, the Board introduced electronic forms (LIQ forms) to capture this information, paving the way for a more streamlined reporting framework. Through a circular issued in June 2024, liquidators were directed to file the LIQ forms at specified stages of the liquidation process.

To formalise the reporting requirement and ensure stricter compliance, Regulation 47B was inserted into the IBBI (Liquidation Process) Regulations, 2016, through amendments notified in January 2025. The Board has now amended this provision and issued a circular comprehensively revising the LIQ forms. The revised framework eliminates duplication, rationalises data requirements, and leverages technology by enabling auto-population of information already available on the portal.

Overview of LIQ Forms

LIQ-1: This form is required to be filed on or before the 10^th day of the subsequent month after the public announcement is made. It captures basic details of the corporate debtor and the date of the public announcement. Where the public announcement is delayed or not made, the reasons for the same are required to be disclosed.

LIQ-2: It must be filed on or before the 10^th day of the subsequent month after submission of the progress report to the Adjudicating Authority under Regulation 15. The form captures, inter alia, confirmation of whether the progress report has been filed within the stipulated time, the status of the liquidation process, and details of valuation, assets realised, PUFE application, SCC meetings, and receipts and payments.

LIQ-3: This form has to be filed on or before the 10^th day of the subsequent month after submission of the dissolution or closure application to the Adjudicating Authority.  The form includes details of the dissolution or closure application, assets realised and unrealised, amounts realised, distribution made to stakeholders in accordance with the waterfall mechanism, and receipts and payments.

LIQ-4: This form has to be filed within seven days of disposal of the dissolution or closure application by the Adjudicating Authority. It includes details of the order of the Adjudicating Authority, revised distribution made to stakeholders (in case of any change in distribution), revised details of receipts and payments (in case of any change), and details of PUFE application.

Key Points to Note

• As a transitional measure, no penalty will be levied for delayed filing of forms, if any, during the initial quarter, from January to March 2026.
• A form modification utility has been introduced, allowing liquidators to update forms already filed.
• Filing a liquidation form after the prescribed due date will attract a late fee.
• In the event of failure to file a form along with requisite information and records, filing of inaccurate or incomplete information or records, or delay in filing the form, the liquidator will be liable to any action which the Board may take as deemed fit under the Insolvency and Bankruptcy Code, 2016, or the regulations made thereunder, including refusal to issue or renew authorisation for assignment.