Winding Up

Meaning

Winding up or liquidation of a co.

represents the last stage in its life.
Proceeding by which a co. is dissolved.
Liquidator

Modes of Winding Up
(i) By court : Compulsory Winding Up
(ii) Voluntary
(a) by members
(b) by creditors

By Court

Special Resolution of the Company

Default in delivering the statutory report to
Registrar
After the expiry of 14 days

Failure to commence business within a year of

incorporation or suspends its business for a
whole year
No. of members is reduced, in case of a public
co. below 7 & below 2 in case of private co.
Unable to pay its debts
Just and Equitable

Request

(i)

(ii)
(iii)
(iv)

A request for the winding up of a co. may

be presented,
A co. may itself present a petition to the
court for winding up after it has passed a
special resolution
Petition by any creditor
Petition by any contributory
Petition by all parties separately or
together-co., creditors, contributories

(v) Request by Registrar

Default is made in delivering the statutory
report to Registrar
The co. doesnt commence its business within
a year of incorporation or suspends its
business for a whole year
No. of members is reduced, in case of a public
co. below 7 & below 2 in case of private co.
Unable to pay its debts
Just and Equitable Grounds

(vi) Petition by Central Government

To defraud the creditors

Fraudulent purposes
Oppressive manner
Formed for unlawful purpose

Commencement of Winding
Up
A resolution has to be passed by the co.
for voluntary wind up & it shall be deemed
to have commenced from the date of its
resolution
Advertisement of Petition every petition
shall be advertised 14 days before the
hearing, stating the date on which the
petition was presented with names &
addresses of petitioners

Consequences of winding up
order

Intimation to Official Liquidator & Registrar

Copy of winding up order to be filed with the

Registrar within 30 days
Order of winding up deemed to be notice of
discharge
When a winding up order has been made, no suit
or other legal proceeding shall be commenced
against the co. except by leave of the court
An order for winding up shall operate in favor of
all creditors & contributories of co.

Voluntary Winding Up
By passing an Ordinary Resolution
By passing a Special Resolution

Commencement of Voluntary Winding Up

Advertisement of the Resolution

Types of Voluntary Winding Up

Members Voluntary Winding Up
Creditors Voluntary Winding Up

Members Voluntary
Declaration of Solvency
The company has no debts
Will be payable in a period of 3 years
Verified by an affidavit

Provisions
Appointment and remuneration of
liquidators
Boards powers to cease
Powers to fill vacancy in office of
liquidator
Notice of appointment of liquidator to be
given to the registrar
Powers of liquidator to accept shares etc

Provisions
Duty of the liquidator to call creditors
meeting in case of insolvency
Duty to call general meeting at the
end of each year
Final meeting an dissolution

Creditors Voluntary
1. Meeting of the creditors
2. Notice of resolution to the registrar
3. Appointment of Liquidator
4. Appointment of Inspection Committee
5. Liquidators Remuneration
6. Boards Power to cease
7. Power to fill Vacancy
8. Power of Liquidator to accept shares
9. General meeting at the end of each year
10. Final meeting and dissolution

Consequences of Winding up

As to members and shareholders

As to creditors
As to servants and officers
As to proceedings against the company
As to costs