company wind up

8/13/2019 company wind up

1/18

Presented by

GROUP 6


2/18

Liquidation: last stage of company life Proceeding by which a company is dissolved

Assets are disposed off

Debts are paid out

Surplus distributed among the members (holding proportions) Done by an administrator (liquidator) Modes of winding up:

Winding up by Court (Secs. 433 to 483)

Voluntary winding up (Secs. 484 to 521) Members voluntary winding up

Creditors voluntary winding up

Winding up subject to Supervision of Court


3/18

If the company has, by special resolution, resolved that the company bewound up by the Tribunal

If default is made in delivering the statutory report to the Registrar or in

holding the statutory meeting

If the company does not commence its business within a year from itsincorporation or suspends its business for a whole year

If the number of members is reduced, in the case of a public company,below seven, and in the case of a private company, below two

If the company is unable to pay its debts


4/18

If the Tribunal is of the opinion that it is just and equitable that thecompany should be wound up

If the company has made a default in filing with the Registrar its balance

sheet and profit and loss account or annual return for any fiveconsecutive financial year

If the company has acted against the interests of the sovereignty andintegrity of India, the security of the State, friendly relations with foreign

States, public order, decency or morality

If the Tribunal is of the opinion that the company should be wound upunder the circumstances specified in section 424G


5/18

Following persons can apply to the court, for petition for winding up The company itself The creditor Any Contributory Registrar Any person authorised by central govt, in case of oppression or

mismanagement (397)


6/18

If the court is satisfied, that sufficient reasons exist in the petition forwinding up, then it will pass a winding up order

1. Court will send notice to an official liquidator, to take change of thecompany. He shall carry out the process of winding up, ( sec. 444)

2. The winding up order, shall be applicable on all the creditors andcontributories, whether they have filed the winding up petition or not.

3. The official liquidator is appointed by central Government4. The company shall relevant particulars, relating to, assets, cash in hand,

bank balance, liabilities, particulars of creditors etc, to the official

liquidator.5. The official liquidator shall within six months, from the date of winding

up order, submit a preliminary report to the court6. An opinion, whether further inquiry is required or not7. The Central Govt. shall keep a cognizance over the functioning of official

liquidator, and may require him to answer any inquiry.


7/18

Winding up my members or creditors of a company without interferenceby court

Objective- Members are left free to settle affairs without going to court They may apply to court for directions, if and when necessary

When the company may be wound up voluntarily:

When period, if any fixed for the duration of company by its articles hasexpired or

The event, if any, has occurred or the occurrence of which the Articles ofAssociation provides that the company is to be dissolved and thecompany in General Meeting passes an ordinary resolution requiring thecompany to be wound up voluntarily

If the company passes a Special Resolution that the company be wound

up voluntarily.


8/18

A. Members Voluntary Winding up

I. When a declaration of solvency has been made by directors andfiled with ROC

B. Creditors Voluntary Winding up

I. When no declaration of solvency has been made and deliveredby the Directors to ROC

II. When liquidator appointed by the company is of the opinion that

the company will not be able to pay off its debts completelywithin the period as mentioned in declaration of the solvency


9/18

COMPANY LIQUIDATOR

REGISTRAR OF

COMPANIES

OFFICIAL

LIQUIDATOR

HIGH COURT


10/18

Directors of the company shall call for a Board of Directors Meeting, andmake a declaration of winding up, accompanied by an Affidavit, statingthat; The company has no debts to pay, or The company will repay it's debts; if any, within 3 years from the

commencement of winding up, as specified in declaration


11/18

Company in the general meeting [in which resolution for winding up is passed,and the creditors in their meeting, appoint liquidator. They may either agree onone liquidator, or if two names are suggested, then liquidator appointed bycreditor shall act Any director, member or creditor may approach the court, for direction that:

1.Liquidator appointed in general meeting shall act, or2.He shall act jointly with liquidator appointed by creditor, or3.Appointing official liquidator, or4.Some other person to be appointed as liquidator.

The remuneration of liquidator shall be fixed by the creditors, or by the court.

On appointment of liquidator, all the power of Board of Directors shall cease.

In case, the winding up procedure, takes more than one year, then he willhave to call a general meeting, and meeting of creditors, at the end of eachyear, and he shall present, a complete account of the procedure, and the

status / position of liquidation


12/18

Where the resolution for winding up has been passed, but the Boardof Directors are not in a position to give a declaration on the liabilityof company, they may call a meeting of creditors, for the purpose ofwinding up.

It is the duty of Board of Directors, to present a full statement ofcompanys affairs, and list of creditors along with their dues, beforethe meeting of creditors.

Whatever resolution, the company passes in creditor's meeting, shallbe given to the Registrar within ten days of its passing


13/18

A voluntary winding up is deemed to be commence at the time when theresolution for voluntary winding up is passed

The company ,from the commencement of the winding up, must cease to

carry on its business except so far as may be required to secure abeneficial winding up

The transfer of shares and alterations in the status of members, madeafter commencement becomes void

A resolution to wind up voluntarily operates as notice of discharge to theemployees of the company

On the appointment of the liquidator all the powers of the board ofdirectors shall cease except after the permission of the registrar.


14/18

Letter by Registrar to enquire if company is inoperation

Registered letter if no reply received within one

month

Publication in the Official Gazette to strike offname and 3 month notice of expiration

Same procedure in winding up if no liquidator isacting or no return is received

PROCEDURE FOLLOWED BY THE REGISTRAR

COMPANY STANDS DISSOLVED

Expiry of 3 month notice period

Registrar publishes it in the Official Gazette


15/18

Application to Court by the company or aggrieved

member or creditor within 20 years

Restoration of name by Court on being satisfied

Directions by the Court

Certified copy of order of Court to be delivered to

Registrar

RESTORATION OF A COMPANYS NAME

LETTER OR NOTICE ADDRESSED TO

Company at its Registered office (under Sec. 560) To director, manager or other officer in the company To each person who subscribed the Memorandum

Notice to liquidator at his last known place of business


16/18

The Calcutta High Court, on January 31, 2013 ordered the winding up of Dunlop IndiaLtd. (DIL) asking the official liquidator to takeover the possession of the companys

assets and its books of records

Creditors moved to court due to non-payment of dues of around Rs.1,000 crore

Dunlop claimed that the management is genuinely trying to revive and run the factories

as it has already cleared dues to 10 out of its 16 creditors, and repaid R39.73 crore outof its total debt of R52 crore between July 2012 and January 2013

Dunlop in its appeal stated that the HC did not even choose to ascertain the wishes of

the creditors before directing winding up. Section 557 of the Companies Act, 1956,

casts a mandatory obligation on the court to conduct a meeting for ascertaining the

wishes of creditors and contributors in all matters relating to the winding up of a

company. On the contrary, the HC held that Dunlop is not serious in its revival

Supreme Court stayed winding up of Dunlop India on June 13, 2013


17/18

http://www.companyliquidator.gov.in
http://www.companyliquidator.gov.in/http://www.companyliquidator.gov.in/http://www.companyliquidator.gov.in/http://www.companyliquidator.gov.in/http://www.companyliquidator.gov.in/


18/18

Documents

company wind up