voluntary winding up of a company
INTRODUCTION
Winding up of a company is defined as a process by which the life of a company is brought to an end and its property administered for the benefit of its members and creditors. A liquidator is appointed and he takes control of the company, collects its assets, pays debts and finally distributes any surplus among the members in accordance with their rights. At the end of winding up, the company will have no assets or liabilities. When the affairs of a company are completely wound up, the dissolution of the company takes place. On dissolution, the company's name is struck off the register of the companies and its legal personality as a corporation comes to an end.
When a company is wound up by the members or the creditors without the intervention of Tribunal, it is called as voluntary winding up. It may take place by:-
By passing an ordinary resolution in the general meeting if: -
(i) the period fixed for the duration of the company by the articles has expired; or
(ii) some event on the happening of which company is to be dissolved, has happened.
By passing a special resolution to wind up voluntarily for any reason whatsoever.
Within 14 days of passing the resolution, whether ordinary or special, it must be advertised in the Official Gazette and also in some important newspaper circulating in the district of the registered office of the company.
The Companies Act (section 484) provides for two methods for voluntary winding up:
1. Members 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
Winding up of a company is defined as a process by which the life of a company is brought to an end and its property administered for the benefit of its members and creditors. A liquidator is appointed and he takes control of the company, collects its assets, pays debts and finally distributes any surplus among the members in accordance with their rights. At the end of winding up, the company will have no assets or liabilities. When the affairs of a company are completely wound up, the dissolution of the company takes place. On dissolution, the company's name is struck off the register of the companies and its legal personality as a corporation comes to an end.
When a company is wound up by the members or the creditors without the intervention of Tribunal, it is called as voluntary winding up. It may take place by:-
By passing an ordinary resolution in the general meeting if: -
(i) the period fixed for the duration of the company by the articles has expired; or
(ii) some event on the happening of which company is to be dissolved, has happened.
By passing a special resolution to wind up voluntarily for any reason whatsoever.
Within 14 days of passing the resolution, whether ordinary or special, it must be advertised in the Official Gazette and also in some important newspaper circulating in the district of the registered office of the company.
The Companies Act (section 484) provides for two methods for voluntary winding up:
1. Members 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