Winding up of the
Company
Submitted by:Simmi
[Link](5.5)
Winding up of a company is a process of closing or
finishing up of a [Link] this process the
company ceases to carry on its [Link]
management of its affairs is taken out of its
management [Link] an administrator called the
liquidator is appointed,who takes control of the
company in his [Link] realizes its assets and pays its
Introduction: debts from the money so [Link] finally,distributes
the surplus among the members if any accordance with
their [Link] at the end of the winding up process the
company will have no assets or liabilities and therefore it
will take a formal step for its dissolution i.e for bringing
an end to its legal [Link] winding up is also
called liquidation in common parlance.
The existance of the company can be terminated by
means of winding up.
The process of which the company is dissolved is called
the winding up of the company.
Definition:
Winding up is the method of ending or dissolving a
[Link] winding up activity includes selling all
assets,paying off creditors and distributing remaining
assets to the partners or shareholders.
Company Act 1956 had prescribed 3 modes of winding
up of a company:
[Link] Court
[Link] the Supervision of Court
Modes of [Link] Winding up which may be by
Winding up of creditors/members
Company
However Companies Act 2013 prescribes only 2 modes of
winding up:
[Link] up by Tribunal(Sec 271)
[Link] Winding up
Compulsory winding up is also caled winding up by the Tribunal
is initiated by application by way of petition to the Tribunal for
winding up [Link] company will be wound up by the Tribunal
if:
[Link] the company is unable to pay its debts.
Winding up by
[Link] the company had resolved by special resolution
Tribunal/Com
[Link] the company has acted against the interest of the
pulsory sovereignty and integrity of India,public order and morality.
winding up [Link] the tribunal is just of the opinion that it is just equitable to
wind up the company
[Link] the company has made default in filing with the registrar its
financial statements or annual returns for immediately
preceding five consecutive financial years.
In the case of Murliandhar vs Bengal Steamship Co
1920
It was held in this case that there was reasonable
grounds for not starting the business within one year.
Rupa Bharti Ltd vs Registrar of Co.1969
Case Laws: However there was failure to resume business for five
years & the prospectus also seemed [Link]’s why
the winding up was ordered.
This ground is applicable because private companies are
of private concern so if they don’t start business within
one year,there will be no necessity to wind up such
companies.
An application for the winding up of the company has to be
made by the way of petition to the court u/s 439 by any of the
Who may following persons:
petition for Company
Winding up Any creditor
Any contributories
The registrar of companies
Any person authorised by central government
Winding up by the members or creditors without any
intervention of the court is called Voluntary winding
[Link] object of Voluntary winding up is that the
members as well as creditors are left free to settle their
affairs without going to the court.
Section 304 lays down that a company may be
wound up voluntarily in either of the following two
ways:
[Link]
[Link] the company in general meeting passes a
Winding up resolution requiring the company to be wound up
voluntarily as a result of the expiry of the period for
its duration, if any, fixed by its articles or on the
occurrence of any event in respect of which the
articles provide that the company should be
dissolved; or
[Link] the company passes a special resolution that the
company is wound up voluntarily.
The process of winding-up of a company is not
very simple, it includes within it many complexities
and technicalities. Earlier there was only one act,
which generally governed this area, but now with
the enactment of the Insolvency and Bankruptcy
Code, 2016, it has become more difficult to apply
these provisions simultaneously and to decide
precedence. Hence, nowadays, The area of
Conclusion: company law has become a specialized field,
because of its technicalities, but it perpetrates
other drawbacks too because the person running
the company, their linkage with the legal
functioning of the company gets broken up. Hence,
simple and easier laws are needed, so that even
non-legal person can know how to run company,
efficiently and legally, without totally depending on
lawyers.