IBBI Introduces Simplified 4-Form Reporting Framework For Liquidation Process

(MENAFN- KNN India) New Delhi, Jan 8 (KNN) The Insolvency and Bankruptcy Board of India (IBBI) has rolled out a simplified and streamlined framework for reporting liquidation-related developments, replacing the existing system with four standardised online forms that track the liquidation process from commencement to closure.

New Framework Effective January 1, 2026

In a circular issued on January 5, the regulator said the revised reporting framework will be applicable from January 1, 2026, and will apply to all liquidation proceedings under the Insolvency and Bankruptcy Code (IBC).

All filings related to liquidation must now be submitted exclusively through the IBBI's electronic platform, within prescribed timelines and using digital signatures or e-signing, in line with the amended IBBI (Liquidation Process) Regulations, 2016.

The new system moves away from repetitive reporting and requires insolvency professionals to submit only stage-specific information, depending on the status of the liquidation.

Four New Forms to Track Liquidation Lifecycle

Under the revised framework, liquidation reporting will be undertaken through four prescribed forms.

LIQ-1 is to be filed at the commencement of liquidation, capturing basic details of the corporate debtor and confirmation of the public announcement, and must be submitted by the 10th of the month following the announcement.

LIQ-2 serves as a quarterly progress report, updating the adjudicating authority on asset valuation, realisation, receipts and payments, and overall progress, and is due by the 10th of the month following submission of the progress report.

LIQ-3 is required when the liquidator applies for dissolution of the corporate debtor or closure of the liquidation process and must be filed by the 10th of the month following such application.

LIQ-4 is to be submitted within seven days after the adjudicating authority passes the order for dissolution or closure.

Reduced Duplication, Lower Compliance Burden

The IBBI said the redesigned forms are intended to eliminate duplication and rationalise data requirements, with information already available on the portal being automatically carried forward.

“These revisions are expected to significantly reduce the time and effort required for compliance by insolvency professionals, while continuing to ensure that the Board receives all essential information in a timely manner,” the circular said.

Transition Relief and Correction Facility

To facilitate a smooth transition, the IBBI announced that no penalty will be levied for delayed filing of the new forms during the initial implementation period from January to March 2026.

The regulator has also introduced a form-modification utility on its electronic platform. Insolvency professionals can correct errors or omissions in submitted forms through an OTP-based authentication process. No fee will be charged for modifications made before the due date.

Continued Accountability

The IBBI clarified that insolvency professionals will continue to be fully responsible for compliance. Failure to file the prescribed forms, or submission of inaccurate or incomplete information, will remain subject to regulatory action under the IBC.

Forms LIQ-1, LIQ-3 and LIQ-4 are already available on the IBBI website, while LIQ-2 will be made available from February 1, 2026, the circular said.

(KNN Bureau)

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