Winding Up of a Company

Winding up of a company is the process through which the life of a company comes to an end and its property is administered for the benefit of its members & creditors. An administrator, called a 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.

Modes of Winding Up of a Company

  • Removal/ Strike off of the name of the company.
  • Winding up under the Companies Act, 2013 by the Tribunal.
  • Liquidation of the company under the Insolvency and Bankruptcy Code, 2016.

Procedure of Winding Up of a Company

  1. A petition presented by the company shall be admitted only if accompanied by a statement of affairs, whereas if filed by any person other than the company, the Tribunal on being satisfied that a prima facie case for winding up of the company is made out, shall by an order direct the company to file its objections along with a statement of its affairs within 30 days of the order.
  2. Within 90 days from the date of presentation of the petition, the tribunal may pass any of the following orders:
    • Dismiss it, with or without costs;
    • Make any interim order as it thinks fit;
    • Appoint a provisional liquidator of the company till the making of a winding-up order;
    • Make an order for the winding-up of the company with or without costs;
    • Any other order as it thinks fit.
  3. The Tribunal at the time of the passing of the order of winding up shall appoint an Official Liquidator or the Liquidator from amongst the Insolvency Professionals registered under the Insolvency and Bankruptcy Code, 2016 as the Provisional Liquidator or the Company Liquidator who shall entirely be responsible for the conduct of the proceedings for the winding up of the company.

Keerthana
Advocate