By Pushpa Roll no -34

It is a process whereby the assets are realised, liabilities are paid off and the surplus is distributed among its members.

by the court Voluntary winding up Winding up subject to supervision of the court

Grounds on which a company may be wound up by the court

If the company has passed a special resolution of its being wound up the court Default in delivering the statutory report to the registrar or holding a statutory meeting It does not commence business within a year from its incorporation or suspends entire business for a whole year The number of members in case of public company is reduced below 7 and private company below 2

Its unable to pay its debts The court is of the opinion that its just and equitable that it should be wound up

The court Any creditor or any prospective creditor Any contributory All or any of above parties whether together or separately The registrar of companies Any person authorized by the central government following upon a report of inspectors.

Acc to sec 441 winding up by the court shall be deemed to commence at the time of presentation of petition for winding up. But in case a resolution has been passed by the company for voluntary winding up, winding up of the court shall be deemed to commence at the time of passing the resolution

In this the company and its creditors are left to settle their affairs without going to the court, altogether they may apply to the court for discretion or orders.

A company may be wound up voluntarily if When the period as per the articles has expired,, or the event has occurred of which the articles provide that the company in general meeting passes an ordinary resolution requiring the company to be wound up voluntarily. If the company passes a resolution that the company be wound up voluntary.

Members voluntary winding up Creditors voluntary winding up

Voluntary winding up in case of which a statutory declaration of solvency has been made and delivered in accordance with sec 448 is referred to as a members voluntary winding up

Where a declaration of solvency of the company is not made and delivered to the registrar in a voluntary winding up its a case of creditors voluntary winding up.

To appoint the official liquidator or any other person as liquidator on justifiable cause being shown To remove the liquidator and appoint official liquidator To determine the remuneration of liquidator

When a company has by special resolution resolved to wind up voluntarily, the court may make an order that voluntary winding up shall continue but subject to such supervision of the court and with such liberty for creditors, contributories or others to apply to the court, and generally on such terms and conditions, as the court thinks just.(522)

Court controls appointment or removal of liquidators Liquidator may exercise all his powers without the sanction of the court. Court obtains jurisdiction over suits and legal proceedings The court has full authority to make calls made by the liquidator and exercise all powers

Voluntary winding up

Winding up subject to supervision of court

Liquidator is appointed by the members/creditors and the court has no role Transfer of shares/disposition of property take place with the permission of liquidator Attachment distress or execution against the company without the leave of court is valid Liquidator can exercise

Court appoints liquidator Transfer of shares/disposition of property take place with the help of court Attachment distress or execution against the company without the leave of court is void