Business Environment and Law-Accounts, Audit And Prevention Of Oppression And Mis Management
Consequences Of Winding Up
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A shareholder is liable to pay full amount of shares held by him.
Consequences
Of Winding Up
A shareholder is liable to pay full amount of shares held by him.
A secured creditor may either (i) rely on the security and ignore the liquidation, or (ii) value his security and prove for the balance of his debt, or (iii) give up his security and prove for the whole amount. Unsecured creditors of an insolvent company are paid in this order: (i) preferential payment under Sec.530, (ii) other debts pari passu.
A winding up order operates as a notice of discharge to the employees and officers of the company except when the business of the company is being continued (Sec. 444). A voluntary winding up also operates as a notice of discharge.
After a winding up petition is presented the court may stay all proceedings against the company.
If the company, while in liquidation, brings or defends any action and is ordered to pay costs, they are paid first out of the assets of the company.
As To Shareholders:
A shareholder is liable to pay full amount of shares held by him.
As To Creditors:
A secured creditor may either (i) rely on the security and ignore the liquidation, or (ii) value his security and prove for the balance of his debt, or (iii) give up his security and prove for the whole amount. Unsecured creditors of an insolvent company are paid in this order: (i) preferential payment under Sec.530, (ii) other debts pari passu.
As To Servants And Officers:
A winding up order operates as a notice of discharge to the employees and officers of the company except when the business of the company is being continued (Sec. 444). A voluntary winding up also operates as a notice of discharge.
As To Proceedings:
After a winding up petition is presented the court may stay all proceedings against the company.
As To Costs:
If the company, while in liquidation, brings or defends any action and is ordered to pay costs, they are paid first out of the assets of the company.
Tags : Business Environment and Law-Accounts, Audit And Prevention Of Oppression And Mis Management
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