M Maria Jessica CONTENTS MEANING DEFINITION MODES OF WINDING UP COMPULSORY WINDING UP WINDING UP BY THE COURT MEANING 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 dis ID: 1002658
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1. UNIT – 5WINDING UP OF A COMPANYM. Maria Jessica
2. CONTENTSMEANING DEFINITIONMODES OF WINDING UPCOMPULSORY WINDING UP (WINDING UP BY THE COURT)
3. MEANING 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 realized assets (or from contribution's from its members), and the surplus, any, is then distributed among the members in proportion to their holdings in the company. The two terms ‘winding up’ and ‘liquidation’ are used interchangeably.
4. DEFINITION According to Prof. Gower, “winding up of a company is a process whereby its life is ended and its property administered for the – benefit of its creditors and members. An administrator, called liquidator, is appointed and he takes control of the company, collects its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights”.
5. Modes of Winding upThere are three modes of winding up of a company, I. Compulsory winding up (secs. 433 to 483): winding up by the court. II. Voluntary winding up (secs. 484 to 521). This may be – a) members’ voluntary winding up, or b) creditors’ voluntary winding up. III. Winding up subject to supervision of the court. (secs. 522 to 527)
6. I. Compulsory Winding Up (Secs. 433 to 483 )( Winding Up by the court)Winding up of a company under the order of a court is also known as compulsory winding up.Grounds for compulsory winding up (sec. 433)A company may be wound up by the court-Special resolution of the company.Default in holding statutory meeting.Failure to commence business.Reduction in membership.Inability to pay debt.Just and equitable.Failure to file balance sheet and profit and loss account.Acting against the interest of Sovereignty and Integrity of India.Winding up of sick Industrial company.
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