Voluntary Winding Up

When a company is wound up by the members or the creditors without the intervention of Tribunal, it is called as voluntary winding up. Circumstances a. The period fixed for the duration of the company by the articles has expired. b. Some event on the happening of which company is to be dissolved, has happened. c. By passing a special resolution to wind up voluntarily for any reason whatsoever. Publication Within 14 days of passing the resolution, whether ordinary or special, it must be advertised in the Official Gazette and also in some important newspaper circulating in the district of the registered office of the company. Modes of Voluntary Winding Up a. Members voluntarily winding up b. Creditors voluntarily winding up Members Voluntarily Winding Up Directors of the company shall call for a Board of Directors Meeting, and make a declaration of winding up, accompanied by an Affidavit, stating that
a. b.

The company has no debts to pay The company will repay its debts; if any, within 3 years from the commencement of winding up

Procedure a. In a General Meeting, Company shall appoint one or more liquidators who shall look after the affairs of winding up and distribution of assets. b. Remuneration of liquidator should be fixed in the General Meeting. c. Notice of appointment of Liquidator to the Registrar within 10 days of appointment. d. Once appointed, powers of Board of Directors, Managing directors cease.

e. In case, the liquidation takes more than a year, the liquidator should call a General Meeting at the end of each year and shall present complete account of procedure and position of liquidator. f. Liquidators duty to lay the final account of winding up before the final meeting. Creditors Voluntarily Winding Up In case of insolvent companies Procedure a. The Board of Directors shall convene a meeting of the Creditors. b. Notice of meeting shall be sent by post and also advertisement in the official gazette along with 2 newspapers. c. A statement of position of the company and a list of creditors along with list of their claims shall be placed before the meeting of creditors. d. In a General Meeting, Creditors will appoint the liquidator. e. A five-member Committee of Inspection is appointed by creditors to supervise the work of liquidator. f. Remuneration of liquidator to be fixed by creditors or committee of inspection. g. Powers of the Board of Directors will cease on appointment. h. In case, the liquidation takes more than a year, the liquidator shall call a general meeting and the meeting of creditors at the end of each year. i. Liquidators duty to lay the final account of winding up before the final meeting. Intervention of Court/Tribunal a. After the final meeting, within 7 days, it is the duty of the Liquidator to submit the report of liquidation with the Registrar and Official Liquidator. b. After scrutinizing, the Official Liquidator will submit the report to the Court/Tribunal. c. On the date of submission of report to the court, the company is said to be dissolved.