IBBI Revises Liquidation Forms to Ease Insolvency Compliance

The Insolvency and Bankruptcy Board of India has introduced revised electronic forms for the liquidation process, aimed at simplifying compliance requirements for insolvency professionals and improving the quality of regulatory filings. The changes will come into effect from January 2026 and are part of broader efforts to streamline processes under the Insolvency and Bankruptcy Code.

Amendments to Liquidation Process Regulations

The revision follows amendments notified on January 2, 2026, to the IBBI (Liquidation Process) Regulations, 2016. Under the amended framework, insolvency professionals are required to submit liquidation-related forms, along with supporting enclosures, on IBBI’s electronic platform within prescribed timelines. The regulator said the move is intended to strengthen transparency while reducing procedural complexity.

Rationalisation and Technology Integration

In a circular issued by the Board, IBBI stated that the existing liquidation forms have been comprehensively revised to remove duplication and rationalise data requirements. The new system leverages technology to auto-populate information already available on the portal, thereby reducing repetitive disclosures. According to the regulator, this is expected to significantly lower the time and effort involved in regulatory compliance without compromising the availability of critical information.

Four Forms to Cover Entire Liquidation Lifecycle

Under the revised framework, four forms — LIQ-1 to LIQ-4 — will now cover the complete lifecycle of the liquidation process. These forms capture key stages such as commencement and public announcement, periodic progress reporting, asset realisation and distribution, details of unclaimed proceeds, meetings of the stakeholders’ consultation committee, and receipts and payments up to dissolution or closure of liquidation.

Imporatnt Facts for Exams

• IBBI regulates insolvency professionals and processes under the IBC.
• Liquidation Process Regulations were notified in 2016.
• LIQ-1 to LIQ-4 cover the full liquidation lifecycle.
• Electronic filing is mandatory for insolvency processes.

Transition Period and Filing Safeguards

IBBI clarified that all revised forms, except LIQ-2, will be available on its website from January 1, 2026, while LIQ-2 will be enabled from February 1, 2026. Existing forms will be discontinued from these dates. To ensure a smooth transition, the regulator has granted penalty relief for delayed filings during the January–March 2026 quarter. It has also introduced a form-modification utility to correct errors through OTP-based authentication, while warning that failure to file or submission of inaccurate information may attract regulatory action.