the effects of the commencement of the winding up on the creditors‚ the company and the employees. Winding up is the process to bring an end the existence of the company. It is also known as liquidation. When a company is liquidated‚ its structure survives the appointment of a liquidator‚ but not the liquidation. Control of assets‚ conducting business‚ and other financial affairs are transferred to the liquidator. The directors cease to have any authority. All bank accounts are frozen‚ any employment
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Agency Partnerships and companies contract through agents. Partners can be agents of the partnership; directors agents of the company. Most cases agents have actual authority If no authority then ostensible authority may apply. Associations Not for profit for members. Types: Unincorporated > 2 members Liability to outsiders uncertain Incorporated >5 members Registered Members liability limited Associated can be sued Sole Trader One person owns business Take profit and bear
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Aron Salomon was a successful leather merchant who specialized in manufacturing leather boots. For many years he ran his business as a sole proprietor. By 1892‚ his sons had become interested in taking part in the business. Salomon decided to incorporate his business as a Limited company‚ Salomon & Co. Ltd. At the time the legal requirement for incorporation was that at least seven persons subscribe as members of a company i.e. as shareholders. Mr. Salomon himself was managing director. Mr. Salomon
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voluntarily winding up 2. Creditors winding up Members voluntarily winding up: A Board Meeting is convened to transact the following business: (a) Making sure that the company can pay its debts in full within a period of three years if put into liquidation. (b) Declaration in Form No. 149 under Rule 313 of the Companies (Court) Rules‚ 1959‚ and verified by an affidavit‚ by the Directors sworn before a Judicial Magistrate on non-judicial stamp paper of Rs. 20/-. (c) The Declaration will be
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1248 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
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winding up of a company. A Contributory can be past or present member and is liable to contribute to the assets of the company in the event of winding up. In the instant case‚ Mr. Gupta ceased to be a member of the Company when it went into liquidation from 15.3.2002. Thus‚ Mr. Gupta will be treated as a past member. He will not be required to contribute to the assets of the company if the following conditions are fulfilled: (1) If Mr. Gupta had ceased to be a member of the company for a period
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Compulsory Liquidation Remedies 1. Introduction * Deficiency of current law: (1) despite introduction of statutory derivative action‚ formulation is unclear and scope is uncertain (2) focus on single act/transaction rather than whole picture/pattern/period (3) remedies are directed to particular transaction and confined to restraint of conduct‚ Recovery of property or ordering of financial compensation * Statutory remedies fall into 2 categories a. Compulsory liquidation remedies courts
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business ventures. Bankruptcy is a federal program‚ which offers an individual or business entity alleviation from all debts obtained‚ both secured and unsecured. A bankruptcy filing offers relief to those in debt‚ through either liquidation or restructuring. Liquidation refers to the selling of the underlying debtor’s assets. When these assets are sold the proceeds are used to fulfill their debt obligations. The laws and regulations which govern bankruptcy are distributed and overheard at the
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Winding up of Company Section 425 of the Companies Act‚ 1956‚ deals with the winding up of companies. Winding up of company is a legal procedure to dissolve the company and put an end to its life. The company ceases to be a ‘going concern’. The term winding up is defined as‚ ‘the process by which the life of a company is ended and its property is administered for the benefit of its members and creditors.’ During the process of winding up‚ the assets of the company are sold and all the debts
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1. Meaning of Winding up or liquidation The winding up or liquidation of a company means the termination of the company by stopping its business‚ collecting its assets and distributing creditors and shareholders‚ in the manner laid down in the Act. 2. Mode Of Winding Up According to section 234‚ the winding up of a company)‚ may be done in any three ways: one of the following (I) Compulsory winding up by the Court (ii) Voluntary winding up b)‚ the members or by creditors (iii) Voluntary
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