B Com Exam > B Com Questions > 3. What is meant by "winding up" of the compa...
Start Learning for Free
3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law?
Most Upvoted Answer
3. What is meant by "winding up" of the company and what are different...
As per Section 2(94A) of the Companies Act, 2013, winding up” means winding up under this Act
or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable.
Chapter XX of the Companies Act, 2013 of Winding up is comprised of four parts.
Introductory (Section 270)
Part I: Winding up by the tribunal (Section 271-303),
Part II: Voluntary winding up (Section 304- 323), Omitted
Part III: Provisions applicable to every mode of winding up (Section 324-358),
Part IV: Official Liquidators (Section 359 -365),
Following are the important aspect of the chapter of winding up-
(i) This chapter contains provisions for winding up of companies registered under the Act and
under the previous companies’ laws.
(ii) This chapter XX is broadly discussed here under four headings, Introductory section, Part I
regulates the process of winding up by the tribunal, Part II directs the process for voluntary
winding up, Part III contains provisions which are applicable to every mode of winging up and
Part IV provides for a summary procedure for winding up for companies having assets of a
book value not exceeding Rupees 1 crore.
(iii) This chapter also provides panel of professionals as company liquidators, who carry out the
responsibilities of a liquidator in the winding up of company.
(iv) Part II of this chapter deals with the voluntary winding up of companies. This part had been
omitted in the Companies Act, 2013 vide enforcement of the Insolvency and BankruptcyCode, 2016. So now this part regulating the voluntary winding up is regulated by the
Insolvency and Bankruptcy Code, 2016.
MODES OF WINDING UP [SECTION 270]
The provisions of Part I shall apply to the winding up of a company by the Tribunal under this Act.
PART I: WINDING UP BY THE TRIBUNAL [SECTION 271 – 303]
3. CIRCUMSTANCES IN WHICH COMPANY MAY BE WOUND UP BY
TRIBUNAL [SECTION 271]
A company may, on a petition under section 272, be wound up by the Tribunal,—
(a) if the company has, by special resolution, resolved that the company be wound up by the
Tribunal;
(b) if the company has acted against the interests of the sovereignty and integrity of India, the
security of the State, friendly relations with foreign States, public order, decency or morality;
(c) if on an application made by the Registrar or any other person authorised by the Central
Government by notification under this Act, the Tribunal is of the opinion that the affairs of the
company have been conducted in a fraudulent manner or the company was formed for
fraudulent and unlawful purpose or the persons concerned in the formation or management
of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith
and that it is proper that the company be wound up;
(d) if the company has made a default in filing with the Registrar its financial statements or
annual returns for immediately preceding five consecutive financial years; or
(e) if the Tribunal is of the opinion that it is just and equitable that the company should be wound
up.
or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable.
Chapter XX of the Companies Act, 2013 of Winding up is comprised of four parts.
Introductory (Section 270)
Part I: Winding up by the tribunal (Section 271-303),
Part II: Voluntary winding up (Section 304- 323), Omitted
Part III: Provisions applicable to every mode of winding up (Section 324-358),
Part IV: Official Liquidators (Section 359 -365),
Following are the important aspect of the chapter of winding up-
(i) This chapter contains provisions for winding up of companies registered under the Act and
under the previous companies’ laws.
(ii) This chapter XX is broadly discussed here under four headings, Introductory section, Part I
regulates the process of winding up by the tribunal, Part II directs the process for voluntary
winding up, Part III contains provisions which are applicable to every mode of winging up and
Part IV provides for a summary procedure for winding up for companies having assets of a
book value not exceeding Rupees 1 crore.
(iii) This chapter also provides panel of professionals as company liquidators, who carry out the
responsibilities of a liquidator in the winding up of company.
(iv) Part II of this chapter deals with the voluntary winding up of companies. This part had been
omitted in the Companies Act, 2013 vide enforcement of the Insolvency and BankruptcyCode, 2016. So now this part regulating the voluntary winding up is regulated by the
Insolvency and Bankruptcy Code, 2016.
MODES OF WINDING UP [SECTION 270]
The provisions of Part I shall apply to the winding up of a company by the Tribunal under this Act.
PART I: WINDING UP BY THE TRIBUNAL [SECTION 271 – 303]
3. CIRCUMSTANCES IN WHICH COMPANY MAY BE WOUND UP BY
TRIBUNAL [SECTION 271]
A company may, on a petition under section 272, be wound up by the Tribunal,—
(a) if the company has, by special resolution, resolved that the company be wound up by the
Tribunal;
(b) if the company has acted against the interests of the sovereignty and integrity of India, the
security of the State, friendly relations with foreign States, public order, decency or morality;
(c) if on an application made by the Registrar or any other person authorised by the Central
Government by notification under this Act, the Tribunal is of the opinion that the affairs of the
company have been conducted in a fraudulent manner or the company was formed for
fraudulent and unlawful purpose or the persons concerned in the formation or management
of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith
and that it is proper that the company be wound up;
(d) if the company has made a default in filing with the Registrar its financial statements or
annual returns for immediately preceding five consecutive financial years; or
(e) if the Tribunal is of the opinion that it is just and equitable that the company should be wound
up.
Community Answer
3. What is meant by "winding up" of the company and what are different...
The term "winding up" refers to the process of closing down a company and distributing its assets among the stakeholders. It is usually done when a company is no longer viable or has reached the end of its business operations.
There are two main types of winding up:
1. Voluntary Winding Up: This occurs when the members or shareholders of a company decide to wind up the company voluntarily. It can be further classified into two types:
a. Members' Voluntary Winding Up: This is initiated when the company is solvent and the shareholders believe that the company has accomplished its purpose or cannot continue its operations profitably. The shareholders appoint a liquidator to wind up the affairs of the company, pay off its debts, and distribute any remaining assets among the shareholders.
b. Creditors' Voluntary Winding Up: In this case, the company is insolvent and unable to pay its debts. The shareholders pass a resolution to wind up the company, appoint a liquidator, and the liquidator's primary duty is to satisfy the claims of the creditors through the realization of the company's assets.
2. Compulsory Winding Up: This occurs when the court orders the winding up of a company. It can happen due to various reasons, including:
a. Inability to pay debts: If a company fails to pay its debts, a creditor can file a petition to the court for the winding up of the company.
b. Just and equitable grounds: This is applicable when the court believes that it is just and equitable to wind up the company, even if it is solvent. This could be due to internal disputes, deadlock between shareholders, or irreparable breakdown of trust and confidence among the stakeholders.
c. Regulatory reasons: Regulatory authorities or government agencies may also petition the court for the winding up of a company if it is found to be engaged in illegal activities, fraudulent practices, or is not operating in compliance with the law.
In all types of winding up, the liquidator plays a crucial role in managing the affairs of the company, realizing its assets, paying off its debts, and distributing the remaining funds to the stakeholders according to the legal order of priorities.
There are two main types of winding up:
1. Voluntary Winding Up: This occurs when the members or shareholders of a company decide to wind up the company voluntarily. It can be further classified into two types:
a. Members' Voluntary Winding Up: This is initiated when the company is solvent and the shareholders believe that the company has accomplished its purpose or cannot continue its operations profitably. The shareholders appoint a liquidator to wind up the affairs of the company, pay off its debts, and distribute any remaining assets among the shareholders.
b. Creditors' Voluntary Winding Up: In this case, the company is insolvent and unable to pay its debts. The shareholders pass a resolution to wind up the company, appoint a liquidator, and the liquidator's primary duty is to satisfy the claims of the creditors through the realization of the company's assets.
2. Compulsory Winding Up: This occurs when the court orders the winding up of a company. It can happen due to various reasons, including:
a. Inability to pay debts: If a company fails to pay its debts, a creditor can file a petition to the court for the winding up of the company.
b. Just and equitable grounds: This is applicable when the court believes that it is just and equitable to wind up the company, even if it is solvent. This could be due to internal disputes, deadlock between shareholders, or irreparable breakdown of trust and confidence among the stakeholders.
c. Regulatory reasons: Regulatory authorities or government agencies may also petition the court for the winding up of a company if it is found to be engaged in illegal activities, fraudulent practices, or is not operating in compliance with the law.
In all types of winding up, the liquidator plays a crucial role in managing the affairs of the company, realizing its assets, paying off its debts, and distributing the remaining funds to the stakeholders according to the legal order of priorities.
|
Explore Courses for B Com exam
|
|
Similar B Com Doubts
3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law?
Question Description
3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law?.
3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law?.
Solutions for 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? in English & in Hindi are available as part of our courses for B Com.
Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? defined & explained in the simplest way possible. Besides giving the explanation of
3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law?, a detailed solution for 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? has been provided alongside types of 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? theory, EduRev gives you an
ample number of questions to practice 3. What is meant by "winding up" of the company and what are different types & modes for winding up under supervision of court/law? tests, examples and also practice B Com tests.
|
|
Explore Courses for B Com exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup