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B.law (Sem-2) Unit-5

Winding up is the process of dissolving a company, which can be initiated voluntarily by members or creditors, or compulsorily by a tribunal. The document outlines the various modes of winding up, including the legal implications and procedures involved, as well as the consequences for shareholders, creditors, and company officers. Additionally, it discusses the Insolvency and Bankruptcy Code of 2016, which consolidates laws related to insolvency and bankruptcy in India.

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17 views22 pages

B.law (Sem-2) Unit-5

Winding up is the process of dissolving a company, which can be initiated voluntarily by members or creditors, or compulsorily by a tribunal. The document outlines the various modes of winding up, including the legal implications and procedures involved, as well as the consequences for shareholders, creditors, and company officers. Additionally, it discusses the Insolvency and Bankruptcy Code of 2016, which consolidates laws related to insolvency and bankruptcy in India.

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nikeshjangam36
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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UNIT © * The Concept of Winding Up. Modes of Windin, inding Up such as Wi Voluntary Win ye 8h 88 Winding Up by ‘Teibunal/Compulsory Winding Up and # Procedure, Eftecis/c » Bffects/Consequences of Winding Up Order by Tribunal, % Provisions Related to Dissot hati 3 a ‘on of Company and Consequences Under Voluntary Winding Provisions for Removal of Name ofthe Company from Registrar of Companies The Concept of Insolvency and Bankrupte ‘ode — 2016. INTRODUCTION Winding Up is the process of dissolution of a company. It is mainly cartied out by « company liquidator. During the process of winding up, the company remains still and has corporate powers till the company gets dissolved. It means winding up is the initial stage and then comes the dissolution, At the time of dissolution, the existence of the company comes to an end when the tribunal passes an order except in a scheme of amalgamation, and the name of the company will be strike off from the register of companies by the registrar, The name of the company is not struck off from the registrar of companies on the winding up. Therefore, there exist a legal status of the company in between the winding up and dissolution where it can be sued under a tribunal of law. Under Sec. 270, the various modes of winding up of a company are, (i) Winding Up by the Tribunal/Compulsory Winding Up and (ji) Voluntary Winding Up. “compulsory When is id ‘an order of the tribunal, itis referred to as “comp windi - Say ies up by Tribunal”, Under Section 272, the tribunal passes et for winding up an application by any ofthe enlisted person. intary winding i 5 Ib is further classified indi is the methods of winding up of companies. _ a Coes up and creditor's ‘voluntary winding up. caer 20 as member's vol untary winding up which takes place after the pert a = explains only about oe hae vol inding up, a” 8 ate reslton mit a ibers: Hr ereditorsoftwo third value mest ve thei PPS ment a (IBC) is a bankruptcy law, Taw for both insolvency and passed by the H 6: Wied rs it can maki i ~ The tribun oy at. a ep) OF. Define Winding up. ikea Ga. Whoisa paar’) wt by the company’s fig. Winding up is the process of dissolution af a company. tis a oe PANY Tide During the winding up, the company is dissolved and in course oF $0 Company Liq GH the sect of the w cx ofthe company are collected ibutions by its mem cs Deiter paleo ut ore ane ot company ox ome conto’ 1. menbens sesioy compa fotlowing their rights. ‘and by compet i) Ifany surplus i lef, then it is distributed tothe members by fol : ee scoseriia He ‘company in th During the process of winding up, the company remains aa aba the dissolution Art fe cof the compan company gets dissolved. It means winding up is the initial stage and then coy Ct at A theting Hence, he is? Of dissolution, the existence ofthe company comes to an end when the une PATE: 1 NOT Oxia the order of» scheme of amalgamation, and the name ofthe company will be strike off ffwmn Tt Tes" Rotpanieg Appointme the registrar. The name of the company is not struck off from the registrar of — = ‘i winding Folia! ‘Therefore, there exist a legal status of the company in between the winding uP and He must maintain proper books of accounts regularly in prescribed manner. These Books are Verified by members, creditors and any offices authorized by the central Government. lunts in prescribed form and file the same with the registrar 6. He must prepare quarterly statement of acco Uke fails to doo then penalyis charged which may increase to S000 for everyday in which failure continues, & Fe at be very carefl while discharging his ties cterwsepenahy is charjed to bm 8. credions Hersey po" tring proses of winding ip of the company wo neubes ad ane cage inlet one aren sectig Of menben aad octane eae 4 fine is charged withthe amount which may be extended 10 10 lathe 9. Tin aul Peon commiting fraud spun company thea immediately he must submit a report to Tribunal. Without affecting the progress of winding up, Tribunal ‘must give order for investigation. 10. ae hl etapa a ol Wing tp hovng the dipond ot eas anjeonors anne explanation an ee ia alfa genera esting to sub nal wine Accounts and give explanation as may be required. 2 et approval from the company thongs yurt-8: Winding Up company liquidator or qpesion stig while wean a fosetle any arangement mane? °Sompany accepts the application and give ot its ive a ing. permissi Order. A copy ot CoRR er wind By taking pemiason from Tybuny, ye neoP7 fonder wa Pony ene ‘or a comm of the windis Lhe may rej saben After sts oe for stocks in companies ete "EYP. It may Pest he ong nbmited to Regie Tribunal Oitable cones POPE within §,3__CONSEQUENCES oF wi NAS Property ie not at fm ~ Ga. Explain Priety the various conse eiNS UP "es shares “auences of wingingsap of ny. Of a compa a ies 4P of & company are a Ryenechs 8 follows, Mota Paper cy Fs/Mombers ee z 3 é F 2, Consequences Creditors Where the Company is Solvent NN onl s (i) Where the Company is Insolvent {Ifthe company is insolvent and is wound up, it has the same it rules asin case of nsolv ae (a) Debts payable peeeolinieny seme (©) The valuing process of annuities, future and contingent liabilities and (©) The respective rights of protected and unprotected creditors 3. Consequences with Respect to Servants and Officers ‘A winding up order is considered to be a notice of discharge to the officers and employees of the company, only exceptional in case the business ofthe company is being continued. Such a ssharge would telieve them from all obligations under their contract of service. A voluntary winding up mest function as 0 notice of discharge to the company’s servants. Example oa is and not o engage in any competing business agreed to act as a director ofa company for seven years 08 WT aaah wins for even years after he failed to hold office. comers ae ae ease is agreement nt compete : i up order operated as a wrongful displacement 0! 10). 1 Ch. 336} with the company. vy. Measures. (19) :pany, [Measures Bros. Lid. v. Mi ( eedings Againstthe Company ce aN ea: theofficial liquidators being PPO." eae _ Incase of aking Wiig ee Ye ated TL dH Doruitor legal preceding er i ne of Wins UP rontary wig UP ofthe court. The court may restrict the : the eompany it upon its suitability. 5. Consequences ast te Costs [SPF 77) taps are not adequate 09 Fr ne assets ofthe ofthe costs, charges andexpenses°, And even remuneration of the liquidator 190 S Consequences 8 to Documents Wa company ie being wos wp whether by Tribe BARI Of an invoice, onder for goods ox business leer sssved iA t Frima facie evidence of the truth of all matters of documents wh otuntarily, all doo rd ane nae tbe © hare recorded. woibutors ofthe company Whee the winding up othe soempury is by ital then creditors or Compan Nt pany the toakrand ne ape sea ey hh etre tere ade te CEE BET ‘When in case of voluntary winding wp the company got diaposed as manner specified by upaa | esohution ofthe company. Scere 5.4 REMOVAL OF NAME OF THE COMPANY FROM REGISTRAR gy COMPANIES nO te Cre G21. “State the provisions with reapect fo the removal of names of companies from the regigiy, “DAR of companies Amewer : According to See. 248 of companies Act, 2013 following are the provisions with respectto the remoyy, oF names of companies fiom the registrar of companies. (Reasons for Removal of Name The registrar may remove the name of'a company from the register of companies for any of the following reasoas @ ®) © the company has failed to commence its business within one year from the date of its incorporatiog, If the company failed to endure its business for a period of 2 preceding financing years. Ifa company has not made any application for obtaining the status of a dormant company under Sec, 2481). (@__ tssuing Notice to Company and Directors Under Sec. 248 (1), if the registrar has a valid reason to remove the name of a company, then he sends a notice to the company and to all the directors of the company stating that the name of the company is getting removed from the register of companies. The board of directors and company are allowed to send ‘their representations along with required documents or any within a period of 30 days from the date of notice, (iii) Voluntary Application by Company . Accompany may voluntarily file an application to the registrar for removing the name of the company ‘from the register of companies on the basis of reasons stated below. | @)_ Hf the company has any of the reasons which mentioned under point (i) i.e., reasons for removal of name. _— @)_ Ifthe company eliminates all its liabilities. ©) If a special resolution is passed. (@_—_1£ 75% members assent in terms of paid-up share capital, (©) Ifa company is regulated under special Act, However, a charitable company cannot make @ voluntary application in regard to removal of name of ‘company from the register of companies, (iv) Public Notice ‘The registrar is responsible to publish notice immediately after the receipt of such applications whet issued in the official Gazette for the information of the general public. (v) Striking off the Name of Company The registrar may strike off the name of the company from the Register of companies at the time of expiry mentioned in the notice. After the name of the company got struck off from the register of companies, the Registrar shall publish the notice in the official gazette which provides the clearance about the dissolution > kyo Z SOG Bans 55 INSOLVENCY AND BANKRUPTO = ceplain in deal insolvency and bankrupt Y_CODE - 2016 ‘ Y Code, 2046 (IBC), oe re reintrar as 10 Verity that prove spe payment oF ischarBe of iabiltes ang, 2 PAPE proceedings then the registra Obligations wane ret F CAN take never ith i sary ge 30 Fle pons int mangement fhe comp Soran ” No Affect on Liability of Director, Mar, * Ain the managing

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