Overview:-
Winding up is such process where the company dissolution for many ways. Winding up plays an important role. If a company is weak in debt or if the owner of the company wants to close the company on his own, then the company should be wound up by holding a conference of management committee and taking the permission about all and sending a notice to all the workers in the registration office within 90 days.
Key Words:-
Company, liquidation, winding up, dissolution
Introduction:-
The main reason for a company to go into winding up is if a company is heavily indebted or the owner of the company wants to close the company on his own, then the company can be liquidated using the process of legal documents. If a loan has been taken from a bank and it is not being paid by a certain date, then the company can go into liquidation. And if it is not possible to pay the salaries of the workers working in the company to the company, then the board of directors can hold a meeting and put the company into liquidation.
Modes Of Liquidating:-
Self- initiate dissolution.
Dissolution by tribunal.
Closing down by the court.
Self – Initiate Dissolution:-
The firm capable of its liquidation on its own. There is some process by whichever a company can be wound up voluntarily.
The executive board regarding the institution sends a notice for all those people e.g. shareholders, members of the company, creditors, and investors.
A meeting has to be called and everyone has to be informed why the company is going into liquidation.
Is there a lot of debt in the company.
Has the company done any illegal work. All the people in the company and the other investors have to be informed.
If the owner of the company himself says that the company is going into liquidation
Even if the company has not given financial statements, the company can go into liquidation. They have to tell all this to the members and shareholders of their company.
And they have to assure that whatever loss has been caused, it will be compensated within the specified time.
Dissolution By The Tribunal:-
Winding up is not done by the company itself but by the creditors by telling the tribunal. The tribunal works like a judicial power, the work that the court can do, the company can do it in a simple way by winding up the tribunal.
There are some grounds for this:-
If the company is bankrupt, then it goes into winding up.
If a company is working against public policy or state security, then it can go into winding up.
If a company is doing illegal and fraudulent work, then that company goes into winding up.
Even if a company has not given financial statements before five years, the tribunal can still wind up the company.
Even if a company is not following the law, the tribunal can put the company into liquidation.
Closing Down By The Court:-
If a company is going into liquidation and a creditor or shareholder files a case in the court, the court can take up the case and order the corporation for finalizing. Such venture does not pay the creditors or shareholders’ money or if their money is weak, a case can be filed against the company. The court appoints a tribunal and orders the company to process the winding up.
Appointment of the Liquidator:-
The tribunal or the court order to the tribunal that appoint a liquidator for the company for the dissolution of the company. The liquidator has a power to dissolve those organization, understand such matter consisting of a business and decide that those establishment has to go for liquidation or not. If the company has debt and not giving to the banks or creditors of the company then the tribunal will decide the process of winding up.
Company:-
The company may be :-
Traded corporation
Non traded entity
One person agency
The one person agency is new concept of this company that there is only one man company. The owner of the company is only one person. This new concept added in The Companies Act, 2013.[1]
Registrar:-
Company has to register under the act of the company. When company is goes for stand the board of directors has to register the name, address, form of the company, work of the company and MOA And AOA of the company. The registration office has appoint the registrar for the registration of the company.
Shareholders:-
Shareholders is the part of the company. When a specific amount of shares is hold by the shareholder. The shareholder invest his money into the company. When any company goes for the liquidation then the shareholders has to attend the meeting of the company and understand why he company goes to wound up?. When he knows the truth of the liquidation the he decided to take his shares out of the company.
Creditors:-
When the company takes money from the creditors for the better settlement of the company then the creditors has same right in company to ask what company goes for liquidation.
Conclusion:-
Every company has their own rights and every person has to follow the company’s rules and regulations of the company. When any company was not given any financial statement to the tribunal for before the five years then the tribunal triggers for the winding up. There are three process of the winding up of the company, 1. Shareholder approved closure. 2. Legal dissolution. 3. Court supervised winding up.
There are three process that the company has to follow. When the company decide by itself that the time is company has to wound up. Then the company has to appoint a liquidator for the liquidation of the company and the liquidator’s decision is the final and binding decision.
Bibliography Books
S.C.Tripathi
Avatar Singh
Electronic Source
Internet
Wikipedia
Webliography
ADV. ANUJA SANJAY WANI
College Name: Progressive Education Society’s Modern Law college, Pune
