COMPANY LAW

Unit-4 Winding up of a Company.

Meaning- proceeding by which a company is dissolved; process of putting an end to the life
of a company.

The assets of the company are disposed of the debt of the company is paid off out of the
realized assets or from the contributors, and if any surplus is left, it is distributed among the
members in proposition to their shareholding in the company.

Winding up of the company is called liquidation of the company.

Modes of winding up:

1. Winding up by the court (compulsory winding up)
 Special resolution: when a company has passed a special resolution for its
winding up and court orders for its winding up on basis of some specific
grounds.
 Oppression: if it is conducting its business in a manner oppressive to any
member or person concerned with the formation of minority shareholders.
 Inability to pay debts
 Unauthorized business
 Non- maintenances of accounts
 Non- holding of statutory meeting
 Non- submission of statutory report
 Failure to commence or suspend business
2. Voluntary winding up of a company- the company and its creditors shall be left to
settle their affairs without going to the court, but they may apply to the court for any
directions and order if and when necessary.
 Expiry period
 Occurrence of events
 Special resolution
 Extraordinary resolution
3. Winding up a company under supervision of court
 If a company makes a default in holding the statutory meeting, the court must
order for its winding up.
 The court may order for the winding up of a company if it is unable to pay its
debts
 If a company does not commence business within one year from its
incorporation, the court must order its winding up.

Unit – 6 Internal control

Controlling and monitoring differences

Monitoring is part of controlling.
IC – integration of the activities, plans, attitudes, policies, and efforts of the people of an
organization working together to provide reasonable assurance that the organization will
achieve its mission.
(Accountability )
Internal controls help companies to comply with laws and regulations and prevent fraud.
They also can help improve operational efficiency by ensuring that budgets are adhered to,
policies are followed, capital shortages are identified, and accurate reports are generated for
leadership.

https://www.investopedia.com/terms/i/internalcontrols.asp

Objectives-
- Safeguarding assets
- Ensuring accuracy of financial information
- Promoting operational efficiency
- Ensuring compliance

Role and importance of management and auditor in internal control:

Management –
- Establishment and oversight
- Monitoring and evaluation
Auditor-
- Independent review
- Risk assessment.
- Recommendations

Internal and external auditor – meaning

Difference between corporate governance and internal control:

- Corp governance refers to the system of structures, processes and practices
implemented by an organization’s board of directors, management, and other
stakeholders to ensure accountability, transparency, and ethical conduct in pursuit of
the organization’s objectives. (ethical part)
- IC is a critical component of copr governance, providing assurance regarding the
integrity of financial reporting, effectiveness of operations and compliance with laws
and regulations. (involves corp governance within it)
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