MODES OF WINDING – UP (SECTION 270): The winding up of a company may be either – by the Tribunal; or Voluntary. Circumstances where Voluntary Winding Up Occurs; This is provided for under Section 393 of The Insolvency Act. The company ceases to carry out business just on commencement of winding up. 6. 7. 144. Default in holding statutory meeting: When default has been committed by a company in the filing of … It is a method wherein the dissolution of a company is. Under … If the company, of its own, passes a Special Resolution that it should be wound up by the court, and presents a petition to the court for same. Under the circumstances, the assets of the company are disposed of, the debts are paid-off out of the realised assets or from the contributions made by its members, and the surplus, if any, is distributed among the members of the company in proportion to their holding. A voluntary liquidation is a self-imposed wind-up and dissolution of a company that has been approved by its shareholders. If the court is of the opinion that it is just and equitable that the company be wound up. All costs, charges and expenses properly incurred in the voluntary winding up of a company, including the remuneration of the liquidators, shall be payable out of the assets of the company in priority to all other claims. Where a company is being wound up voluntarily the liquidators or any contributory of the company may apply to the Court to determine any question arising in the matter of such winding up, or to exercise, in respect of the enforcing of calls or of any other matter, all or any of the powers which the Court might exercise if the company were being wound up by the Court; and the Court, if satisfied that the determination of such question or the required exercise of power will be just and beneficial, may accede, wholly or partially, to such application, on such terms and subject to such conditions as the Court thinks fit, or may make such other decree on such application as the Court thinks just. Click here for a full list of Google Analytics cookies used on this site. (2) Where the winding up and dissolution has commenced by virtue of paragraph (b) of subsection (1), the person, if any, designated by resolution of the members passed prior to such commencement, failing whom the person, if any, designated in the articles of association shall, upon such commencement and without further action, become the liquidator, failing which the directors at the time of such commencement shall, upon such commencement and without further action, become the liquidators, failing which section 144 shall apply. The company is solvent. 2. 149. A company about to be or in the course of being wound up voluntarily may, by a special resolution, delegate to its creditors, or to any committee of its creditors, the power of appointing liquidators or any of them, and of filling any vacancies among the liquidators, or may, by a like resolution, enter into any arrangement with respect to the powers to be exercised by the liquidators and the manner in which they are to be exercised; and any act done by the creditors in pursuance of such delegated power shall have the same effect as if it had been done by the company. Even a solvent Company can wind up its affairs, with the approval of the members of the Company. The liquidator represents the interests of all creditors. However, there are differences between member’s voluntarily winding up and creditor’s voluntarily winding up. This means that the company must be in a position to pay its debts in full within 12 months of the commencement of the winding up procedure. 433 of the Act lays down the circumstances in which the National Company Law Tribunal can order for a winding up of the company. Winding up of a solvent company: Members’ voluntary winding up. Expiry of period : If the period fixed for the duration of the company in the articles has expired. However, these provisions now fall within the purview of Section 59 of the Code which deals with the voluntary liquidation of corporate persons – this Section is yet to be notified. 2. 2. Clicking the Accept All button means you are accepting analytics and third-party cookies (check the full list). Section 484 of the Act, 1956 lays down the following circumstances under which a Company may wound up voluntarily: 1. Functionally the Official Liquidator is under the supervision and control of the High Court but administratively is under the control of the Central Government through the Regional Director. 5. In other words, winding up is a legal process to dissolve the business of a company. Give advertisement in newspaper specifying date, time and place and object of the final general meeting. Section 484 of the Act, 1956 lays down the following circumstances under which a Company may wound up voluntarily: Auditor’s certificate to the effect that the winding up is in accordance with the provisions of the Companies Act. If a special resolution is passed by the members of the company for the voluntary liquidation of the company. To control which cookies are set, click Settings. No objection or Tax clearance certificate from Income Tax Department for the remittance. Winding up the affairs of a company either by its members or by its creditors, without any interference of court it is called voluntary winding up of a company.