Module – IX
Company Meetings & Company
Secretary
Course Leader:
Dr. K. Srinivasan
Department of Management Studies
Christ University, Bangalore.
Winding Up
Winding Up of a company is the process whereby its
life is ended and its property administered for the
benefit of its creditors and members.
An administrator, called 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
Professor. Gower
Modes of Winding Up
Winding up by the Court (Compulsory Winding Up)
Voluntary Winding Up
a)
Member’s Voluntary Winding Up
b)
Creditor’s Voluntary Winding Up
Winding Up subject to the supervision of the Court.
Winding Up by the Court
 Special Resolution of the Company
 Default in holding statutory meeting
 Failure to commence business
 Reduction in Membership
 Inability to pay its debts
 Demand for payment neglected
 Decreed debt unsatisfied
 Commercial Insolvency
 Just and Equitable
 Substratum of the Company is gone
 Majority of the shareholders using the powers unfairly
 Deadlock in the management to achieve the objectives
Petition for Winding Up
By the Company
By the Creditors
Debentures Holders
Central or state Government whom any tax charge is due.
Person who has monetary claim against the company
By any Contributory or Contributors
Membership is reduced below the statutory minimum
Original Allottee of shares
Held the company shares for at least 6 months during the 18
months immediately before the commencement of winding up.
Shares have transferred through the death of a former holder.
By the Registrar
By any person authorized by the Central Government
Content of the Petition
Name of the Company with the date of its
Incorporation
Address of the Registered Office
Amount of Paid – Up Capital
Statement of facts to justify a winding Up order.
Request to the Court to issue an order of winding
up
Statement in the form of an affidavit that the facts
stated in the petition are correct and true.
Procedures for Winding Up
 Commencement of Winding Up
 Advertisement of Petition
 Power of Court to stay or restrain proceedings against
company
 Intimation to Liquidator or Registrar
 Copy of Winding up order to be filled with the
Registrar
Consequences of Winding Up
 Order for winding up deemed to be notice of discharge
 Suits Stayed
 Powers of the Court
 Effect of Winding Up
 Official Liquidator to be liquidator
Liquidator
Liquidator is a person who helps the court to complete
the liquidation proceedings. An official liquidator may
be appointed from a panel of professional firms of
CA, Advocates, Company Secretaries etc., which the
Central Government shall constitute for the court; or
may be a body corporate consisting of such
professionals as may be approved by the central
government from time to time; or may be a whole
time or part time officer appointed by the central
government.
Duties of Liquidator
Proceedings in Winding Up
Report
Custody of Company’s Property
Control of Powers
Meetings of Creditors and Contributors
Directions from the Court
Proper Books
Audit of Accounts
Appointment of Committee of Inspection
Pending Liquidation
Powers of Official
Liquidator
1. To defend any suit, civil or criminal proceedings in the name
2.
3.
4.
5.
and on behalf of the company.
To carry on the business of the company so far as may be
necessary for the beneficial winding up of the company.
To sell movable or immovable property of the company –
wholly or in parcels either privately or through public action.
To raise money on the security of the assets of the company.
To do all things as may be necessary for the winding up of
the affairs of the company and distributing its assets.
Other Powers….
 Execute all deeds, Receipts and other documents in the
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name and on behalf of the company under company’s seal.
Prove, rank and claim the insolvency of a contributory.
Draw, accept, make and endorse any bill of exchange or
promissory note in the name and on behalf of the company.
Appoint an agent to do any business which the liquidator is
unable to do himself, etc.
Appoint Security guards, Valuer, CA etc.
Publish an advertisement inviting bids for sale of the assets
of the company etc.
General Powers of the Court
Stay of Winding Up of the Company
Settlement of list of contributories
Delivery of Property
Summoning of Persons suspected of having property
of the company
Exclusion of Creditors
Order as to Costs
Arrest of Absconding Contributory
Meetings of Creditors or contributories
Voluntarily Winding Up
Voluntarily winding up means winding up by the
members or creditors of a company without interferences
by the Court.
The main objectives of this winding up is to settle their
affairs without going to the Court of Law.
The company may wound up voluntarily on two ways;
By Passing an Ordinary Resolution
By Passing an Special Resolution
Provisions Applicable for
MVWU
Appointment of Liquidators
Board’s powers to cease on appointment of a liquidator
Powers to fill vacancy in office of liquidator
Notice of appointment of liquidator to be given to Registrar
Power of Liquidator to accept shares etc.
Duty of liquidator to call creditors meeting in case of
insolvency
Duty to call General Meeting at the end of the year
Final Meeting and Dissolution – Penalty Rs. 1,000
Provisions as to Annual & Final Meeting in case of Insolvency.
Duties of Secretary in
MVWU
Arrange the Board Meeting, within 5 weeks immediately
preceding the date of passing the resolution for MVWU.
Arranging & Preparing P&L Account, B/S & Audited Report
and ending with the latest practicable date before the date of
declaration
Prepare declaration of Solvency, get it verified by affidavit
before the Magistrate & file with the Registrar with all reports.
Prepare & Issue of notice of the meeting to members & to
check special resolution passed, appointment & remuneration
fixed in the meeting.
Check the Official Gazette and newspapers within 14 days
after passing resolution
Continued…..
Notice of appointment of liquidator is filed with
registrar with 10 days of passing resolution.
Check the special resolution for winding up is filed with
the Registrar within 30 days of the meeting.
Check every invoice, order and business letter issued by
the company during the period contains a statement that
company is being wound up
Check all the Books, Documents, Movables &
Immovable properties of the company are delivered to
the liquidator, for public examination and give evidence
as required.
Creditors Voluntarily Winding
Up (CVWU)
Meeting of Creditors – 2 Newspapers
Resolution Notice given to Registrar – 10 Days & Rs. 500
Appointment of Liquidator
Committee Appointment Inspection – Not more than 5 Persons
Liquidator Remuneration
Board’s Powers to cease an appointment of Liquidator
Powers to fill vacancy in office of liquidator
Duty of Liquidator to call meeting of company & Creditors at
the end of each year
Final Meeting & Dissolution
WU- Subject to Supervision
of Court
WU of a company subject to the supervision of the court
presupposes a voluntary winding up of the Company
At any time after a company passed a winding up, the
Court may make an order that voluntary winding up shall
continue, but subject to the supervision of the Court.
The court may give such liberty to creditors, contributors
or others to apply to as it thinks.
Petition for the continuance of a voluntary winding up
subject to the supervision of the Court is deemed to be a
petition for winding up by the Court.
Consequences of Winding
Up
Consequence as to shareholders
Consequence as to Creditors
Consequence as to Servants & Officers
Consequence as to Proceedings against the Company
Consequence as to Costs