COMPANY

An association of individuals formed for some common

purpose
Carry on some business for profit ,to promote art ,science,

education or charitable purpose

artificial person

Registered according to the law relating to companies

Sec 3(1)(i)of companies act 1956

Winding up
Putting an end to its life All its affairs are closed or wound up Assets and properties are realized and distributed among

the creditors and shareholders(act)

ie, the process involves

@ Realization of assets @ Payment of liability to creditors @ Distribution of surplus

At the end the company will have no assets or liabilities

Reasons for winding up

Main reasons are :
The main object of the company for which it was

established has been accomplished It has become impossible to carry out the main objects of the company Has sold the business or the undertaking to another company or individual Not in a position to pay its debts in full

Modes of winding up
Winding up by Tribunal Voluntary Winding up

(a) Members voluntary winding up (b) Creditors voluntary winding up

Winding up by Tribunal
Under the order of tribunal
Compulsory winding up Tribunal will make order on an application by any of

the person enlisted in sec.439

They can order the winding up under the sec 433 on

certain grounds

Grounds for compulsory winding up

Special resolution{sec.433(a)}
Default in holding statutory meeting[sec.433(b)] Failure to commence business [sec.433(c)] Inability to pay debts [sec.433(e)] Just and equitable [sec.433(f)] Failure to file balance sheet Acted against integrity of India

Who can apply for order

The company {sec.439(1)(a)}
Registrar{sec.439(1)(e)} Creditors{sec.439(1)(b)} Share holders{sec.439(1)(e)} Central /state government{sec.439(1)(f)}

Commencement of winding up
Is deemed to commence at the time of the

presentation of petition (sec.441)

If a resolution has been passed by the company before

the petition .it shall be deemed to commence from the time of passing of resolution

Disposal of petition
On receiving petition ,issues notice to the company
Cause the issue of public notice and will invite

objections After hearing both sides ,the tribunal may @ dismiss the petition @ adjourn the hearing @ make an interim order necessary @ pass an order

Appointment of provisional liquidation

After the presentation of petition but before the order Appoint the official liquidator to be the provisional

liquidator of the company

Objective is to protect and preserve the assets of the

company during the pendency of winding up

becomes the liquidator of the company as soon as the

order is passed

Consequences
Order is passed, shall cause to send intimation to the

official liquidator and registrar (sec.444) The petitioner and the company should file a certified copy of order with the registrar with in 30 days The registrar shall notify in the official gazette that the order has been passed {sec.445(1)&(2)} It shall be deemed to be a notice of discharge to officers and employees of the company except when the business of the company is continued{sec445(3)}

 The official liquidator becomes the liquidator of the

company {sec449} A statement of affairs of the company should be made and submitted to the liquidator It should be verified by director,manager,secetary or chief officer The statement should show @the assets of the company @the debts and liabilities @the names &addresses of the creditors including the amount of debts @The debts due to the company and the names and addresses of the persons and the amount likely to be realized

 After the statement of affairs the liquidator must submit

a preliminary report to the tribunal ,within 6 months Liquidator takes the companys property onto his custody The accounts of receipts and payments has to be presented twice in a year to the tribunal A copy should be send to every creditor and contributory A copy is also filed with registrar When the affairs of the company is completely wounded up or when ,for want of funds, the liquidator cannot proceed with winding up The tribunal shall make an order that the company is dissolved from the date of the order

Voluntary winding up
Winding up of the company on the basis of resolution

passed by the share holders without the interference of tribunal Company at its meeting passes the resolution it is more advantage than compulsory winding up

Circumstances
By passing an ordinary resolution {sec.484(1)(a)}
By passing a special resolution{sec.484(1)(b)}

Types of voluntary winding up

The 2 types are

@members' voluntary winding up @creditors' winding up

Members voluntary winding up

If the company at the time of winding up is a solvent

company and is able to pay its liabilities in full The declaration of solvency is made before the general meeting which passed the resolution Declaration of solvency Shareholders resolution

Various provisions & act

In general meeting appoints one or more liquidators

the company shall also fix the remuneration (sec.490) Vacancies in the office of the liquidators' are filled in the general meeting {sec492) The power of board of directors come to an end (sec.491) Shall give notice of appointment of the liquidator to the registrar(sec.493) Must call general meeting twice a year final meeting of the company (sec.497)

 A copy of final accounts of the winding up should be

send to registrar Should make a scrutiny of books and papers and send a report of scrutiny to tribunal The order of tribunal will be based on the statement of affairs

Creditors voluntary winding up

If the company posses to winding up voluntarily
the directors are not in a position to make statutory

declaration of solvency{sec.488(5)} Creditors who appoints the liquidator and generally conduct the winding up the provisions are by and large similar to those of members voluntary winding up

Provisions in the act of cvwu

Call a meeting of creditors before the general meeting
The notice of the meeting should be sent by post to

creditors Must advertise in the official gazette and in two newspapers (sec500) A director is nominated for preside over the creditors meeting Copies of the resolution passed are to be sent to the registrar

 A liquidator is nominated by the respective e meeting creditors may in a meeting appoint a committee of

inspection Remuneration of the liquidator is to be fixed by the committee or else by the court (sec.504) The powers of the board of directors come to an end (sec.505) The final meeting (sec.509)

Reference
Business laws by L.R.POTTI
Company law by ANIL K.NAIR Company law by S.S GULSHAN Laws for business by M.M Sulphay, Az-har Basheer

Thank you!!!!!!!!!!!!!