Any creditor or creditors including any contingent or prospective creditor or creditors. Any contributory or contributories. All or any of the aforesaid parties, together or separately. The Registrar. Any person authorized by the central government under section By the Central or State Government. Consequences of the Winding up Order by the Tribunal: In case the Tribunal issues a winding up order against the company, the following consequences will follow :.
In voluntary winding up, the company and its creditors are left free to settle affairs without going to the Tribunal. Although the Company their Liquidator or any contributory or creditor may apply to the Tribunal for directions or orders, as and when necessary, for determination of any question arising in the course of the winding up. It may be mentioned that under the previous Companies Act, Voluntary Winding Up was of two types.
The companies Act, has abolished the above distinction. Grounds for Voluntary Winding Up : According to Section , a company may be wound up voluntarily under any of the following two circumstances :. The resolution for voluntary winding up when passed, must be advertised within 14 days of the passing of the resolution in the Official Gazette and also in some important newspaper circulating in the district of the registered office of the company.
Section What are the grounds for voluntary winding up of a company? What are the consequences of voluntary winding up? Section 2 From the commencement of voluntary winding up, the company ceases to carry on its business, except so far as may be required for the beneficial winding up thereof. The corporate state and powers of the company shall, however, continue until it is dissolved.
Section and 4 A resolution to wind up voluntarily operates as notice of discharge to the employees of the company, except. They are required to lodge their claims and prove their debts to the Company Liquidator.
In the case of disputed claims, however, a voluntary winding up does not operate as a stay of any existing proceedings or prevent the institution of new proceedings. They have to declare that the company has no debts or that it will be able to pay its debts in full. The meetings shall be held either on the same day, one after the other or on the two consecutive days.
The company thereafter dissolves. It occurs in the absence of declaration of solvency i. Hence, the Act empowers the creditors of dominate over the members in this mode of winding up so as to effectively protect their interest. Windings up with the intervention of the court are ordered where the voluntary winding up has already commenced.
As a matter of fact, it is the voluntary winding up but under the supervision of the court. On hearing a winding up petition, the Court may dismiss it or adjourn the hearing or make interim orders or make an order for winding up the company, with or without costs or any other order that it thinks fit Section Welcome Back.
Continue with Google. Continue with Facebook. Forgot Password? New User? Sign Up. Create your account now. Signup with Email. Gender Male Female. Create Account. Already Have an Account? All you need of B Com at this link: B Com. Introduction Winding up which is more commonly called liquidation in Scotland is proceeding for the realisation of the assets, the payment of creditors, and the distribution of the surplus, if any, among the shareholders, so that the company may be finally dissolved.
Modes of Winding Up A company can be wound up in three ways : Compulsory winding up by the Court; Voluntary winding up : i Members' voluntary winding up; ii Creditors' voluntary winding up; Voluntary winding up subject to the supervision of the Court [Sec. A petition for winding up may be presented to the Court on any of the grounds stated below : 1. Special resolution A company may be wound up by the Court if it has, by a special resolution, resolved that it be wound up by the Court.
Default in filing statutory report or holding statutory meeting If a company has made a default in delivering the statutory report to the Registrar or in holding the statutory meeting, a petition for winding up of the company may be presented to the Court. Failure to commence business within one year or suspension of business for a whole year Where a company does not commence its business within one year from its incorporation or suspends its business for a whole year, a winding up petition may be presented to the Court.
The Court will not order for winding up on the grounds, if : a suspension of business is due to temporary causes ; and b there are reasonable prospects for starting of business within a reasonable time.
Reduction of membership below the minimum When the number of members is reduced, in the case of a public company, below 7 and in the case of a private company, below 2, a petition for winding up of the company may be presented to the Court. Company's inability to pay its debts A winding up petition may be presented if the company is unable to pay its debt.
A company will be deemed to be unable to pay its loan in the following conditions Section : a a creditor of more than Rs. Just and Equitable [Sec. Winding up by the Court on 'just and equitable' grounds may be ordered in the cases given below : a When the substratum of the company has gone : In the words of Shah, J. The petition for winding up may be brought by any one of the following : 1. Petition by Company A company can make a petition only when it has passed a special resolution to that effect.
Petition by Creditors The word 'creditor' includes secured creditor, debentureholder and a trustee for debentureholder. Contributory Petition The term 'contributory' means every person who is liable to contribute to the assets of the company in the event of its being wound up. A contributory is entitled to present a petition for winding up a company if : a the number is reduced, in the case of a public company below seven and in the case of private company below two; and b the shares in respects of which he is a contributory either were originally allotted to him or have been held by him; and c the shares have been registered in his name, for at least six months during the period of 18 months immediately before the commencement of the winding up; and d the shares have been devolved on him during the death of a former holder [Sec.
Registrar's Petition The Registrar can present a petition for winding up a company only on the following grounds, viz. Petition by any Person Authorised by the Central Government If it appears to the Central Government from any report of the inspectors appointed to investigate the affairs of the company, that it is expedient to wind up the company because its business is being conducted with intent to defraud creditors, members or any other person, or its business is being conducted for a fraudulent or unlawful purpose, or the management is guilty of fraud, misfeasance or other misconduct, the Central Government may authorise any person to present to the Court a petition for winding up of the company that is just and equitable that the company should be wound up.
Commencement of Winding up Section Where before the presentation of a petition for the winding up of a company by the Court, a resolution has been passed by the company for voluntary winding up, the winding up of the company will be deemed to have commenced from the date of the resolution.
If the majority of directors in a special board meeting resolve to wind up the company. The company in general meeting the shareholders shall appoint one or more liquidators for the purpose of winding up the affairs and disturbing the assets of the company.
The shareholders fix the remuneration to be paid to the liquidators. On the appointment to liquidator, all powers of the directors and other officers of the company are ceased. So far as the company in general meeting of the liquidator sanctions the powers to remain with them. When the affairs of the company are finally wound up. The liquidator shall call a general meeting of the shareholders and place before them the full accounts of the company.
Also, send its copy to the registrar within one week of the meeting. The company shall be dissolved on the expiration of three months on the receipts of the copy of account and other relevant documents from the liquidators. The company calls a meeting of its creditors and appoints a liquidator. When liquidation gets completed, the liquidator calls the final meeting of the company. A copy of his report is also sent to the registrar. The registrar on receiving the accounts and other documents.
Then takes the action of dissolution of the company as laid down in the Companies Ordinance. According to Companies Ordinance , a voluntary winding up of a company can also be carried under the strict supervision of the court.
When a company has passed a resolution for voluntary winding up. Then, the court may issue its own motion or on the application of any person. Moreover, also makes an order that voluntary winding up shall continue, if the company is no more able to pay its debts.
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