Winding up of the Company
As the Company has incorporate, in the same way the Company has end also. “Winding Up” means the end Company’s life. After the order of winding up of the Company, the assets of the Company realise for the repayment of dues of outsiders. The process of winding up continues till the dissolution of the Company. The ongoing business is administered by liquidator appointment by Tribunal during the process of winding up “Dissolution” means permanently removal of the name of the Company from the Register of the Companies. During the process of winding up the existence of the Company doesn’t take away butDissolution is the last stage of the Company. The corporate entity comes to an end on the dissolution of the Company.
Here we will study about the procedure of winding up of the Company which leads to the dissolution of the Company and the action needs to be taken to effect of the same.
GROUNDS FOR WINDING UP OF THE COMPANY
The following are the grounds of the winding up of the Company.
- Company by passing Special Resolution;
- Company act against the interest of the integrity of India;
- Company formed and conducted for fraudulent purpose;
- Default in filing of Financial Statements and Annual Returns for last Five Financial Years;
- Just and equitable by Tribunal.
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WHO IS ELIGIBLE TO FILE PETITION FOR WINDING UP
- Company and Contributories both
- Person authorised by Central Government
- Central Government or State Government for integrity of India.
PROCEDURE FOR WINDING UP OF THE COMPANY
You need to follow the following steps for the dissolution of the Company.
- Preparing and submission of petition to Tribunal
Any one of the person mentioned above can make a petition to the Tribunal under Section 272 of the Companies Act, 2013 for winding up of the Company.
- Power of Tribunal
After filing of the petition, the tribunal shall pass following order within ninety days of filing of petition.
- Passed Interim order
- Appoint provisional liquidator
- Order of winding up
- Any other order
- Filing of Statement of Affairs
The Company needs to file Statements of Affairs after making petition.
- Appointment of the Liquidator
At the time of passing of winding up order, Tribunal shall appoint Liquidator for the conduct the proceedings for the winding up of the Company. The Tribunal may remove the liquidator or the liquidator may resign from his office.
- Constitution of Winding up Committee
Company Liquidator shall make an application to the Tribunal within three weeks of winding up order for constitution of a winding up Committee for monitor the progress of the proceeding of the winding up. The report alongwith the Minutes of the Meeting on monthly basis shall place before the Tribunal till the final report of dissolution is submitted. Thereafter, the final report approved by committee shall be submitted to Tribunal.
- Submission of Report by Company Liquidators
The Company Liquidator shall make a report to the Tribunal within 60 days of the winding up order regarding the details of asset, capital, liabilities, dues, contracts, legal cases etc. The tribunal shall fix the time limit for completion of the entire proceeding on the consideration of report of the Liquidator
- Custody of Companies Properties
All the property and actionable claims shall preserve in the custody of the Company Liquidator which shall be the deemed custody of the Tribunal.
- Settlement of the List of Contributories
The Tribunal will settle the list of the Contributories and the Asset of the Company shall applied for the discharge of the Liabilities.
- Advisory Committee
While passing the order the Tribunal will direct to constitute the Advisory Committee consist of not more than 12 members which will be the Creditors and Contributories of the Company. The Chairman of the Committee shall be the Company Liquidator.
- Audit of the Company Liquidator’s Account
The proper and regular books of Account maintained by Company Liquidatorshall require to be audited. One copy of Audited Accounts is required to be sent to Tribunal and another sent to Registar to open for inspection by any Creditors and Contributories or any person interested. If the account relates to government Company then a copy is also sent to them. The Printed copy of the audited Accounts is also sent to every Creditor and Contributor by post.
- Order for Dissolution of the Company
The Company Liquidators shall make an application to the Tribunal for dissolution of the Company after the affairs of the winding up has been completely wound up. The Company shall stand dissolved from the date of the order. A copy of the order will be submitted by Company Liquidator to the Registrar within 30 days of the passing of the order.