Presented By: Vamsi Tej Ravali Vinay Aijaz

 Winding

up of a company is the stage, where by the company takes its last breath. It is a process by which business of the company is wound up, and the company ceases to exist anymore.
the assets of the company are sold, and the proceedings collected are used to discharge the liabilities on a priority basis

 All

Gower’s Winding up of a company is a process where by its life is ended and its property is administrated for the benefit of its creditors and members..2 nd ed. p.4 th ed..789)  Pennington’s Winding up of a company is a process by which the management of a company’s affairs is taken out of its directors hands.628) . p. Prof. definition : (Modern Company Law. definition : ( Company Law. its assets are realized by the liquidator and its debts are paid out of the proceeds of realization and any balance remaining is returned to its members.

This may be ___ (1) Members’ voluntary winding up. 484 to 521). Winding up subject to the supervision of the court ( secs. 522 to 527). There are three types of winding up of a company. winding up by the court (secs.. viz. Voluntary Winding Up ( secs.    . 433 to 483). or (2) Creditors’ voluntary winding up.

 Default in holding statutory meeting.  Inability to pay current liabilities. . Grounds for compulsory winding up (Sec. Winding up of a company under the order of court is also known as compulsory winding up.  Just and equitable. 433)  Special resolution by the company.  Reduction in membership.  Failure to commence business.

.The court may wound up the company on a petition submitted to it on any of the following grounds: Special resolution by the company : Sometimes. In such cases. the court may order the winding up of the company on a petition presented by the company. Court has discretionary powers in this regard and may refuse to wind up the company. the company passes a special resolution to the effect that the company be wound up by the court.

 . company fails to commence the business within one year from its registration.b) Default in holding statutory meeting: Company must hold statutory meeting with in 6 months from the date of its formation. the court may order the winding up of a company on a petition presented to it by the registrar. the court may order the winding up of a company on petition presented to it by the registrar of company. In such case.  c) Failure to commence business : Sometimes. If company failed in holding of such meeting .

 . company unable to pay its debts . the court may order the winding up of a company. e) Inability to pay its current liabilities: Sometimes. the court may order the winding up of a company on petition presented by the creditors. d) Reduction in membership: Public company must have at least seven members and private have two. If the membership of any company reduced below this limit.

An application to the court for the winding up of a company is made by a petition. The interest of general public should also be considered. 439. the court may order winding up of a company under any ground. Under Sec. a petition for the winding up of a company may be presented. there must be some strong grounds for winding up. f ) Just and equitable : Under this clause. However. subject to the provision of this section   .

439(1)(b)] . 439(1)(d)] . a petition for the winding up of a company may be presented.  An application to the court for the winding up of a company is made by a petition:       Types of petitioneries are… by the company [Sec. or . 439(1)(c)] . or by any creditor or creditors [Sec.or by all or any of the prior parties whether together or separately [Sec. subject to the provision of this section. 439(1)(a)] .Under Sec. or by any contributary or contributories [Sec. 439.

    . 439(1)(f)] Whether workers entitled to be heard in a winding up petition The interest of the workers of a company has also to be taken into consideration while admitting a petition for winding up the company. The workers have a rights to heard before the provisional liquidator. or by the central or state government in that behalf [Sec. The workers are entitled to appear at the hearing of the winding-up petition.  by the registrar [Sec. The workers of the company have the same locus standi. 439(1)(e)] .

Lmt. 433 (f) for the winding up of a company without the active representation if the workers of the company is not at all maintainable and no order for the winding up could be passed without the express contest of the workers of the company.P.) That the petition filed under Sec. (vs) Shikkhar Mehra. Case. (1987) 62 Comp. : . it has been held in Kilpest Pvt. 717 (M. Example National Textiles workers Unions Case.

      Powers of court to stay or restrain proceedings against company [Sec. or restraint of. the company. with or without cost . 442] At any time after the presentation of a winding up petition and before a winding up order has been made. or make an order for winding up the company with or without costs or any other as it thinks fit. or adjourn the hearing conditionally or un conditionally . or any creditor or contributory may apply to the court for a stay. 443] On hearing the winding up petition. further proceedings in the court. the court may dismiss it. or make any interim order that it thinks fit . . Power of the court on hearing petition [Sec.

its consequences date back to the commencement of winding up. 455 (3)]. Suits Stayed [Sec. 447 ]. The other consequences of winding up by the court are as follows: Intimation to official liquidator and registrar (Sec. 455 (1). Once the court makes an for the Winding -up of a company. Powers of the court [Sec. Effect of winding -up order [Sec. 444) Copy of Winding-up order to be filed with the registrar [Sec. Official Liquidator to be liquidator [Sec. (1-A) and (2) Order for Winding-up deemed to be notice of discharge [Sec. 446 (1)].        . 446 (2) and (3) ]. 449].

and finally distributed any surplus among the members in accordance with their rights.  The . collects its assets. An administrator. is appointed and he takes control of the company. called liquidator. appointer may also appoint one or more deputy or assistant liquidators to assist the liquidator in the discharge of his functions. pays its depts.

 To get accounts audited.  To take custody of company's property.  Information as to a pending Winding-up.Liquidator has the following duties :  To conduct proceedings in Winding-up.  To comply with directions of the creditors or contributories or the committee of inspection. .  To keep statutory books.  To make a report.  Central government 's control of liquidators.  To summon meetings of creditors and contributories.  To obtain directions from the tribunal.

 To sell the immovable /movable property of the company.Exercisable with the sanction of the tribunal To institute or defend any suit in the name and on behalf of the company.  To compromise any call .Compromise or settle with any class of creditors.liability or debt.  To pay .attorney.  To raise money on the security of the company.  .  To carry on the business of the company.  To do all such other things as may be necessary for the Winding -up of the company.  To appoint advocate .

make any bill of exchange in the name of the company.  Appoint any agent.execute all deeds .  Claim in the insolvency of any contributory.receipts and other documents.Exercisable without the sanction of the tribunal.  Inspect the records and returns of the company with the registrar. Do all acts .  .accept .  Draw .

   Voluntary winding up WITHOUT INTERVENTION OF THE COURT Members voluntary winding up Creditors voluntary winding up Voluntary winding up UNDER THE SUPERVISION OF THE COURT  .

. In other words. company fixes the period for the duration of company. It requires for procedures :  By ordinary resolution:.Sometimes.  By special resolution:. in such case it required ordinary resolution.Company may. at any time. And it is called voluntary winding up. The company may also be wound up without intervention of court. pass special resolution that company be wound up voluntary. it means the winding up by the members and the creditors.

 Members voluntary winding up:- It is the winding up in the case of which a ‘declaration of solvency’ is made and delivered to registrar. .  Creditors voluntary winding up:- In such case. winding up shall arise where the company is unable to pay its debts in full. They are given the powers to control and supervise the winding up process.

2. 6. 5. Sanction of the tribunal or the committee of inspection or of meeting of creditors .SI. No such declaration is required. Such a committee may be constituted Creditors have dominating control. 4. 3. No meeting of members is necessary. Director's declaration of Solvency is a must Meeting of members and passing a resolution is required No committee of Inspection Members have dominating control Members appoint the liquidator Liquidator exercises some of his powers with the sanction of a special resolution of members. Creditors have choice over members. Members’ voluntary Winding up Creditors’ voluntary Winding up 1.NO.

Avoidance of transfer of shares.      Effects of voluntary winding-up – Voluntary Winding-up has the following effects : On status of Company Corporate powers to continue until dissolution Board's powers to cease on liquidator's appointment. . Effect of company's employees.

Because the court gets all the powers which it can exercise in a compulsory winding up. it is voluntary winding up but under the supervision of the court.As a matter of fact. it may also remove any liquidator.  The court may appoint liquidator.  At any time after a company has passed a resolution for voluntary winding up. It also has the advantages of compulsory winding up.  . the court may make an order that voluntary winding up shall continue but subject to the supervision of the court.

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