winding up of a company
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EP-CL-35
STUDY XXXV
WINDING UP OF COMPANIES
NOTE: Wherever the term ‘Court’ is being used in the chapter that will be substituted by
‘Tribunal’ in accordance with vide Companies
(Second Amendment) Act, 2002 w.e.f. a date yet to be notified.
INTRODUCTION
-It is the process by which a company’s life is ended and its property administered by liquidator or administrator for the benefit of creditors and members
-A company can be wound up even when it is solvent
DIFFERENCES BETWEEN INSOLVENCY AND
WINDING UP
1. In the case of insolvency, the whole of the insolvent’s property is taken out of his hands and rests in the Court or the Official Assignee, as the case may be - In winding up, the property remains vested in the company, subject to its being administered by the liquidator for the purposes of winding up
2. In insolvency, an insolvent individual can obtain his discharge subsequently and lead a normal life but in case of winding up of a company, it is subsequently dissolved
3. In the case of an individual, his property is administered by the Official Assignee or the
Official Receiver only after he is declared an
Executive Short Notes – Winding Up of Companies
ICSI eLearning Coaching Program © GOLS 2011
1249
EP-CL-35
insolvent by the Court but under winding up, the liquidator can assume powers even when the company is fully solvent
DIFFERENCES BETWEEN WINDING UP AND
DISSOLUTION
1. Winding up is the first stage in the process whereby assets are realised, liabilities are paid off and the surplus, if any, distributed among its members -Dissolution is the next stage whereby the existence of the company is withdrawn by the law. 2. Winding up is a set of procedures while dissolution is an act of putting an end to the company 3. Creditors can prove their debts in the winding up but not on the dissolution of the company.
MODES OF WINDING UP
A company registered under the Companies Act,
1956 may be wound up
EP-CL-35
STUDY XXXV
WINDING UP OF COMPANIES
NOTE: Wherever the term ‘Court’ is being used in the chapter that will be substituted by
‘Tribunal’ in accordance with vide Companies
(Second Amendment) Act, 2002 w.e.f. a date yet to be notified.
INTRODUCTION
-It is the process by which a company’s life is ended and its property administered by liquidator or administrator for the benefit of creditors and members
-A company can be wound up even when it is solvent
DIFFERENCES BETWEEN INSOLVENCY AND
WINDING UP
1. In the case of insolvency, the whole of the insolvent’s property is taken out of his hands and rests in the Court or the Official Assignee, as the case may be - In winding up, the property remains vested in the company, subject to its being administered by the liquidator for the purposes of winding up
2. In insolvency, an insolvent individual can obtain his discharge subsequently and lead a normal life but in case of winding up of a company, it is subsequently dissolved
3. In the case of an individual, his property is administered by the Official Assignee or the
Official Receiver only after he is declared an
Executive Short Notes – Winding Up of Companies
ICSI eLearning Coaching Program © GOLS 2011
1249
EP-CL-35
insolvent by the Court but under winding up, the liquidator can assume powers even when the company is fully solvent
DIFFERENCES BETWEEN WINDING UP AND
DISSOLUTION
1. Winding up is the first stage in the process whereby assets are realised, liabilities are paid off and the surplus, if any, distributed among its members -Dissolution is the next stage whereby the existence of the company is withdrawn by the law. 2. Winding up is a set of procedures while dissolution is an act of putting an end to the company 3. Creditors can prove their debts in the winding up but not on the dissolution of the company.
MODES OF WINDING UP
A company registered under the Companies Act,
1956 may be wound up