Business Environment and Law-Winding Up
Winding Up By Court
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A winding up by the court, or compulsory winding up, as it is often called, is initiated by an application by way of petition presented to the Appropriate court for winding up order.
Winding Up By Court
A winding up by the court, or compulsory winding up, as it is often called, is initiated by an application by way of petition presented to the Appropriate court for winding up order.
1. Resolved to be wound up by the court.
3. If the company does not commence
its business within a year from its incorporation, or suspends its business for
a whole year.
A winding up by the court, or compulsory winding up, as it is often called, is initiated by an application by way of petition presented to the Appropriate court for winding up order.
Grounds For Compulsory Winding Up:
1. Resolved to be wound up by the court.
2. If default is made in delivering
the statutory report to the registrar or in holding the statutory meeting.
4. If the number of members falls
below seven (or in case of a private company, below two).
5. If the company is unable to pay its debts.
6. If the court is of opinion that
it is just and equitable that the company should be wound up.
7. Just & Equitable: (a) Main
object failed (b) Deadlock in management (c) Cannot carry on business except
losses. (d) Mere bubble – and does not carry any business or does not have any
property. (e) Majority of shareholder have adapted an aggressive policy towards
the minority.
The following persons may file petition: (1) the company; (2) creditor; (3) contributory; (4) all or any of the above parties; (5) the registrar; (6) any person authorized by the Central Government (7) by virtue of Sec. 440, when a company is already being wound up voluntarily, the court may order winding up by it.
A company may be wound up voluntarily: (i) when the period (if any) fixed for its duration has expired or an event on the happening of which the company is to be wound up has happened and the company in general meeting has passed an ordinary resolution to wind up; or (ii) if the company passes a special resolution to wind up voluntarily (Sec. 484). There are two kinds of voluntary winding up, namely: Member’s or
Creditors’.
Where a company is being wound up voluntarily by the court may order the continuation of voluntary winding up subject to its supervision with any terms or conditions. The liquidator will continue to exercise all powers subject to any restrictions laid down by the court.
Who May Petition:
The following persons may file petition: (1) the company; (2) creditor; (3) contributory; (4) all or any of the above parties; (5) the registrar; (6) any person authorized by the Central Government (7) by virtue of Sec. 440, when a company is already being wound up voluntarily, the court may order winding up by it.
Voluntary Winding Up:
A company may be wound up voluntarily: (i) when the period (if any) fixed for its duration has expired or an event on the happening of which the company is to be wound up has happened and the company in general meeting has passed an ordinary resolution to wind up; or (ii) if the company passes a special resolution to wind up voluntarily (Sec. 484). There are two kinds of voluntary winding up, namely: Member’s or
Creditors’.
Winding Up Under Supervision:
Where a company is being wound up voluntarily by the court may order the continuation of voluntary winding up subject to its supervision with any terms or conditions. The liquidator will continue to exercise all powers subject to any restrictions laid down by the court.
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