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c Meaning of winding up
c Modes of winding up
c Winding up by the court
Grounds of compulsory winding up
Petition

c Power of Court
c Consequences of winding up order
c Procedure of winding up by the court
Official liquidator
Liquidator
Provisional liquidator
Statement of affairs
Committee of inspection
General powers of the court
Dissolution of company

c Voluntary winding up
Type f voluntary winding up
Membersǯ voluntary winding up
Creditors voluntary winding up

c Winding up subject to Supervision of Court


c Consequences of winding up
c Defunct company
% 
 

 Winding up or liquidation of a company


represents the last stage in its life. It means a
proceeding by which a company is dissolved.
The assets of the company are disposed of,
the debts are paid off out of the realised
assets(or from contributions from its
members), and the surplus, if any, is then
distributed among the members in
proportions to their holdings in the
company. The two terms Dzwinding updz and
Dzliquidationdz are used interchangeably.
Modes Of Winding Up
c Winding up by a court, i.e., compulsory
winding up ( Sec . 433-483)
c Voluntary winding up ( Sec . 484-521).
Members voluntary winding up, or
Creditors voluntary winding up.

c Winding up subject to Supervision of


Court

  w 

Winding up of a company under the order
of a court is also known as DzCompulsory
Winding Updz.
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1. Special resolution of the company( sec.
433(a))
2. Default in delivering the statutory report to
the registrar or in holding statutory
meetings(sec. 433(b))
3. Failure to commence, or suspension of
business(sec. 433(c))
4. Reduction in membership(sec. 433(d))
5. Inability to pay its debts(sec. 433(e))
6. Just and equitable(sec.433(f))
w
Pirie V. Stewart (1904)
ñ  
n addition to the court for the following
winding up of a company is made by a petition.
1. Petition by the company[sec.439(1)(a)]
2. Petition by any creditor or
creditors[sec.439(1)(b)]
3. [Petition by any contributory or
contributories[sec.(1)(c)]
4. Petition by all or any of the prior parties
whether together or separately[sec.439(1)(d)]
5. Petition by the registrar[sec.439(1)(e)]
6. Petition by the Central
Government[Sec.439(1)(f)]
ñ  w 
ñ     
  

   

 
 )
t any time after the presentation of a
winding of petition and before a winding
up order has been made, the company, or
any creditor or contributory may apply to
the court for a stay of, or restraint of,
further proceedings in the court.
ñ  w  !
ñ 
On hearing a winding up petition, the court
may
a) Dismiss it, with or without cost; or
b) djourn the hearing conditionally or
unconditionally; or
c) Make any interim order that it thinks fit; or
d) Make an order for winding up the company
with or without costs or any other order as if
thinks fit.
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# 
1. Intimation to official liquidator and
registrar(sec.444)
2. Copy of winding up order to be filed with
the registrar[sec.445(1),(1-a)(2)]
3. Order for winding up deemed to be notice
of discharge[455(3)]
4. Suits stayed[sec.446(1)]
5. Powers of the court[sec.(2)and(3)]
6. Effect of winding up order(sec.447)
7. Official liquidator to be liquidator(sec.449)
ñ   
  $
w 
 Official Liquidator(sec.448)
a) There shall be attached to High Court an
official liquidator appointed by the Central
Government.
b) The official receiver attached to a District Court
for insolvency purposes shall be the official
liquidator attached to the District Court.

The Central Government may also appoint one


or more Deputy or ssistant Official
Liquidators to assist the official liquidator in
the discharge of his functions.
 Liquidator(sec.449)
On a winding up order being made in
respect of a company, the official
liquidator shall, by virtue of his office,
become the liquidator of the company.

Style of Liquidator(sec.452)
The liquidator shall be described by the
style of the official liquidator of the
particular company in respect of which he
act and not by his individual name.
 Provisional Liquidator(Sec.450)
t any time the presentation of a winding
up petition and before the making of a
winding up order, the court may appoint
the official liquidator to be the liquidator
provisionally.
 d
  
 d
     
 Within 21 days of relevant date (i.e.
the date of appointment of a provisional liquidator, or
where no such appointment is made, the date of winding up
order), the company shall submit a statement to the official
liquidator as to affairs of the company.
1. The assets of the company, showing separately cash in
hand and at bank and negotiable securities.
2. Its debts and liabilities.
3. Names, residence and occupations, of its creditors, stating
separately the amount of secured and unsecured debts.
4. In the case of secured debts, particulars of the securities
held by the creditors, their value and dates on which they
were given.
5. The debts due to the company and names and the address
of the persons from whom they are due and the amount
likely to be realised.
6. Such further information may be required by the official
liquidator.
       



ppointment and composition of


committee(sec. 464)
Constitutions and proceedings of the
committee(sec. 465)
¬ 
ñ    

c Stay of winding up proceedings(sec.466)


c Settlement of contributories(sec.467)
Payment of debts due to contributory(sec.470)
Power to make calls(sec.470)
djustment of rights of contributories(sec.475)
c Delivery of property(Sec.468)
c Exclusion of creditors(sec.474)
c Order as to costs(sec.476)
c Summoning of persons suspected of having property
of the company(sec.477)
c Public examination(sec.478)
c rrest of absconding contributory(sec.479)
c Meeting of creditors or contributories(sec.557)
{   
w  %
Dissolution puts an end to the existence of a company. 
company which has been dissolved no longer exists as a
separate entity capable of holding property or of being sued
in the court .
¬     
1. When the affairs of the company have been completely
wound up, or
2. When the court is of opinion that the liquidator cannot
proceed with the winding up for want of funds and assets,
or
3. For any other reason

within 30 days of the order of the court , the liquidator shall


send a copy of the order to the registrar who shall make in
his books a minute of the dissolution of the company.
’ 
  &'
()'
Voluntary winding up means winding up by the
members or creditors of a company without
interference of the court.

c Circumstances in which a company may be wound


up voluntarily(sec.484)
by passing an ordinary resolution.
by passing a special resolution

c Commencement of voluntary winding up(sec.486)

c dvertisement of resolution(sec.485)
  ’ 
 
1. Membersǯ voluntary winding up, or
2. Creditorsǯ voluntary winding up
%$’ 
 
Declaration of solvency(sec.488)
The declaration shall be made by a
majority of the directors at a meeting of
the board that the company has no debts
or that it will be able to pay its debts in
full within 3 years from the
commencement of winding up.
ñ *  $ 
$*  
1. ppointment and remuneration of
liquidators
2. boardǯs powers to cease on appointment of a
liquidator
3. Power to fill vacancy in office of liquidator
4. Notice of appointment of liquidator to be
given to registrar
5. Power of liquidator to accept shares
6. Duty to call general meeting at end of each
year
7. Final meeting and dissolution
w  +*  

 voluntary winding up of company in


which a declaration of its solvency is not
made is referred as creditorsǯ voluntary
winding up.
ñ *  $   +
*  
1. Meeting of creditors(sec.500)
2. Notice of resolution to be given to
registrar(sec.501)(within 10 days)
3. ppointment of liquidators(sec.502)
4. ppointment of committee of
inspection(sec.503)
5. Liquidation of remuneration(sec.504)
6. Power to fill vacancy in office of
liquidator(sec.506)
Consequences of winding up
0 Consequences as to shareholders/members
0 Consequences as to creditors
c Where the company is solvent(sec.528)
c Where the company is insolvent

0 Consequences as to servants & officers


0 Consequences as to proceedings he
company
0 Consequences as to costs
Defunct company
Procedure to be followed by the registrar
1. Letter by Registrar to inquire if company is
in operation.
2. Registrar letter if no reply received within
one month.
3. Publication in the Official Gazette to strike
off name
4. Same procedure in winding up if no
liquidator is acting or no return is received
£     +

1. pplication by aggrieved member or


creditor within 20 years.
2. Restoration of name by Court on being
satisfied.
3. Directions by the Court.
4. Certified copy of order of court to be
delivered to Registered office or care of
director .