1. Modes of Winding Up

2. Winding Up
Winding Up of a company is the process whereby its life is ended and its property administered for the benefit of its creditors and members.
An administrator, called liquidator, is appointed and he takes control of the company, collects its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights
Professor. Gower
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

3. Modes of Winding Up Winding up by the Court (Compulsory Winding Up)
Voluntary Winding Up
Member’s Voluntary Winding Up
Creditor’s Voluntary Winding Up
Winding Up subject to the supervision of the Court.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

4. Winding Up by the Court Special Resolution of the Company
Default in holding statutory meeting
Failure to commence business
Reduction in Membership
Inability to pay its debts
Demand for payment neglected
Decreed debt unsatisfied
Commercial Insolvency
Just and Equitable
Substratum of the Company is gone
Majority of the shareholders using the powers unfairly
Deadlock in the management to achieve the objectives
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

5. Petition for Winding Up
By the Company
By the Creditors
Debentures Holders
Central or state Government whom any tax charge is due.
Person who has monetary claim against the company
By any Contributory or Contributors
Membership is reduced below the statutory minimum
Original Allottee of shares
Held the company shares for at least 6 months during the 18 months immediately before the commencement of winding up.
Shares have transferred through the death of a former holder.
By the Registrar
By any person authorized by the Central Government
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

6. Content of the Petition
Name of the Company with the date of its Incorporation
Address of the Registered Office
Amount of Paid – Up Capital
Statement of facts to justify a winding Up order.
Request to the Court to issue an order of winding up
Statement in the form of an affidavit that the facts stated in the petition are correct and true.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

7. Procedures for Winding Up
Commencement of Winding Up
Advertisement of Petition
Power of Court to stay or restrain proceedings against company
Intimation to Liquidator or Registrar
Copy of Winding up order to be filled with the Registrar
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

8. Consequences of Winding Up
Order for winding up deemed to be notice of discharge
Suits Stayed
Powers of the Court
Effect of Winding Up
Official Liquidator to be liquidator
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

9. Liquidator
Liquidator is a person who helps the court to complete the liquidation proceedings. An official liquidator may be appointed from a panel of professional firms of CA, Advocates, Company Secretaries etc., which the Central Government shall constitute for the court; or may be a body corporate consisting of such professionals as may be approved by the central government from time to time; or may be a whole time or part time officer appointed by the central government.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

10. Duties of Liquidator Proceedings in Winding Up Report
Custody of Company’s Property
Control of Powers
Meetings of Creditors and Contributors
Directions from the Court
Proper Books
Audit of Accounts
Appointment of Committee of Inspection
Pending Liquidation
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

11. Powers of Official Liquidator
To defend any suit, civil or criminal proceedings in the name and on behalf of the company.
To carry on the business of the company so far as may be necessary for the beneficial winding up of the company.
To sell movable or immovable property of the company – wholly or in parcels either privately or through public action.
To raise money on the security of the assets of the company.
To do all things as may be necessary for the winding up of the affairs of the company and distributing its assets.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

12. Other Powers….
Execute all deeds, Receipts and other documents in the name and on behalf of the company under company’s seal.
Prove, rank and claim the insolvency of a contributory.
Draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company.
Appoint an agent to do any business which the liquidator is unable to do himself, etc.
Appoint Security guards, Valuer, CA etc.
Publish an advertisement inviting bids for sale of the assets of the company etc.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

13. General Powers of the Court
Stay of Winding Up of the Company
Settlement of list of contributories
Delivery of Property
Summoning of Persons suspected of having property of the company
Exclusion of Creditors
Order as to Costs
Arrest of Absconding Contributory
Meetings of Creditors or contributories
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

14. Voluntarily Winding Up
Voluntarily winding up means winding up by the members or creditors of a company without interferences by the Court.
The main objectives of this winding up is to settle their affairs without going to the Court of Law.
The company may wound up voluntarily on two ways;
By Passing an Ordinary Resolution
By Passing an Special Resolution
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

15. Provisions Applicable for MVWU
Appointment of Liquidators
Board’s powers to cease on appointment of a liquidator
Powers to fill vacancy in office of liquidator
Notice of appointment of liquidator to be given to Registrar
Power of Liquidator to accept shares etc.
Duty of liquidator to call creditors meeting in case of insolvency
Duty to call General Meeting at the end of the year
Final Meeting and Dissolution – Penalty Rs. 1,000
Provisions as to Annual & Final Meeting in case of Insolvency.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

16. Duties of Secretary in MVWU
Arrange the Board Meeting, within 5 weeks immediately preceding the date of passing the resolution for MVWU.
Arranging & Preparing P&L Account, B/S & Audited Report and ending with the latest practicable date before the date of declaration
Prepare declaration of Solvency, get it verified by affidavit before the Magistrate & file with the Registrar with all reports.
Prepare & Issue of notice of the meeting to members & to check special resolution passed, appointment & remuneration fixed in the meeting.
Check the Official Gazette and newspapers within 14 days after passing resolution
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

17. Continued…..
Notice of appointment of liquidator is filed with registrar with 10 days of passing resolution.
Check the special resolution for winding up is filed with the Registrar within 30 days of the meeting.
Check every invoice, order and business letter issued by the company during the period contains a statement that company is being wound up
Check all the Books, Documents, Movables & Immovable properties of the company are delivered to the liquidator, for public examination and give evidence as required.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

18. Creditors Voluntarily Winding Up (CVWU)
Meeting of Creditors – 2 Newspapers
Resolution Notice given to Registrar – 10 Days & Rs. 500
Appointment of Liquidator
Committee Appointment Inspection – Not more than 5 Persons
Liquidator Remuneration
Board’s Powers to cease an appointment of Liquidator
Powers to fill vacancy in office of liquidator
Duty of Liquidator to call meeting of company & Creditors at the end of each year
Final Meeting & Dissolution
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

19. WU- Subject to Supervision of Court
WU of a company subject to the supervision of the court presupposes a voluntary winding up of the Company
At any time after a company passed a winding up, the Court may make an order that voluntary winding up shall continue, but subject to the supervision of the Court.
The court may give such liberty to creditors, contributors or others to apply to as it thinks.
Petition for the continuance of a voluntary winding up subject to the supervision of the Court is deemed to be a petition for winding up by the Court.
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

20. Consequences of Winding Up
Consequence as to shareholders
Consequence as to Creditors
Consequence as to Servants & Officers
Consequence as to Proceedings against the Company
Consequence as to Costs
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018

21. All the Best for Ur End Semester
Unit IV– Company Law, Legal Aspects of Business - Mr.K.Mohan Kumar, AP/MBA
8/29/2018