Unit-4

Chapter-3: Winding-up of Companies

 Very Short Answer Type Questions:

Ques.1 What are the various modes of Winding-up?

Ans. Modes of Winding-up:
Section 270 lays down that the winding-up of a company may be either (a) by the National
Company Law Tribunal; or (b) Voluntary.

Ques.2 Give the meaning of Liquidation of a Company or Winding up of a company.

Ans. Liquidation of a company means the termination of the legal existence of a company.
Under the circumstances, the assets of the company are disposed off and debts are paid, out of
the amount realised from assets or from the contributions made by the members and the surplus,
if any, is distributed among members in proportion to their holding.

Ques.3 Who is a Liquidator?

Ans. When there is liquidation of a company, one or more persons are required to be appointed
specially for conducting the liquidation or winding up proceedings of the company. Such a
person’s are called Liquidator’s. He is required to realise the assets, discharge the liabilities and
distribute the surplus, if any among shareholders.

Ques.4 Who are Contributories?

Ans. Contributories are all the present and past members of the company who are liable to
jointly contribute to the assets of the company an amount sufficient for payment of its debts and
liabilities, to meet the cost of liquidation and adjust the rights of contributories among
themselves, in the event of liquidation of a company.

Ques.5 Explain the circumstances in which Company may be Wound-up voluntarily.

Ans. Section 304 lays down that a company may be wound up voluntarily in either of the
following two ways:
 1. As a result of expiry of duration: If the company in general meeting passes a resolution
requiring the company to be wound up voluntarily as a result of the expiry of the period
of its duration fixed by its Articles or on the occurrence of any event in respect of which
the Articles provide that the company should be dissolved, then the company may be
wound up voluntarily; or

2. As a result of special resolution: If the company passes a special resolution that the
company be wound up voluntarily, then the company may be wound up voluntarily.

Ques.6 Explain the powers and functions of Official Liquidator.

Ans. Section 360 lays down that the Official Liquidator shall exercise such powers and
perform such duties as the Central Government may prescribe. Without prejudice to such
prescribed power, the official liquidator may perform the following functions:

(a) He may exercise all or any of the powers as may be exercised by a Company Liquidator
under the provisions of this Act, and
(b) He may conduct inquiries or investigations, if directed by the Tribunal or the Central
Government in respect of matters arising out of winding-up proceedings.

Ques.7 What do you understand by 'Actionable Claims'.

Ans. ‘Actionable claims’ means a claim to any unsecured debt that is, other than a debt secured
by mortgage of immovable property or by hypothecation or pledge or movable property.

 Short Answer Type Questions:

Ques.1 What is Winding-up of companies?

Ans. 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. In words of
Professor Gower, "Winding up of a company is the process whereby its life is ended 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."
Ques.2 What do you understand by dissolution?
Ans. ‘Dissolution’ of a company means the termination of the legal existence or personality of
the company. After the dissolution of a company, it cannot be sued because at that time it does
not remain in legal existence. On dissolution, the name of the company is struck off the Register
of Companies by the Registrar and this fact is published in the Official Gazette. Thus, a company
is created by law and terminated by law through dissolution. In fact, winding-up of a company
precedes its dissolution. It may be noted that as soon as the affairs of the company are fully
wound-up, the liquidator calls the final general meeting of the company and thereafter follows
the dissolution.
The word 'dissolution' implies bringing the existence of the company to an end. A dissolved
company cannot hold any property or be sued in Tribunal of law. If any of the property still
remains at the point of dissolution such property will vest in the Government immediately on
dissolution. The Liquidator also becomes functus officio on dissolution.

Ques.3 Explain Liability of present and past members as Contributories.

Ans. Liability of present and past members as Contributories:

1. A person who has been a member shall not be liable to contribute if he has ceased to be a
member for the preceding one year or more before the commencement of winding-up.
Thus, the past members of within one year period before the beginning of the winding-up
shall not be liable to contribute to the assets of the company.
2. A person who has been a member shall not be liable to contribute in respect of any debt
or liability of the company contracted after he ceased to be a member.
3. No person who has been a member shall be liable to contribute unless it appears to the
Tribunal that the present members are unable to satisfy the contributions required to be
made by them in pursuance of this Act.
4. In the case of a company limited by shares, no contribution shall be required from any
person who is or has been a member, exceeding the amount unpaid if any on the shares in
respect of which he is liable as such member.
5. In the case of a company limited by guarantee, no contribution shall be required from any
person who is or has been a member, exceeding the amount undertaken to be contributed
by him to the assets of the company in the event of its being wound up but if the
company has a share capital, such member shall be liable to contribute to the extent of
any sum unpaid on any shares held by him as if the company were a company limited by
shares.

Ques.4 Who can file the petition for winding-up of a company?

Ans. Subject to the provisions of Section 272 of the Act the following can file present the
petition for winding up of a company:

1. The company
2. Creditors of the company holding debentures might be a trustee or not a trustee have
appointed.
3. Shareholders or the contributors of the company who is a holder of the paid-up shares.
4. Contingent or prospective creditors whose debts are unpaid.
5. Registrar
6. Liquidators
7. The person authorised on behalf of the State or central government

Ques.5 What are the circumstances in which a Company may be Wound-up?

Ans. A company may be wound up by a tribunal where the petition has been filed under
the following circumstances:
 1. A special resolution is passed by the company that the company shall be wound up by the
tribunal.
2. Failure of the company in reporting a statutory report at the registrar’s office.
3. Non-commencement of the company in business within one year of incorporation.
4. Number of members has reduced below 7 for a public company or 2 for a private
company respectively.
5. The debts of the company are unpayable by the company.
6. The tribunal is just equitable to wound up the company.
7. The company is unable to file its balance sheet or annual return for five financial years
consecutively.
8. The company has acted against the sovereignty and integrity of the country.

Ques.6 Explain the General powers of the tribunal.

Ans. "The Tribunal has been provided the following general powers under Section 295 to
301:
(i) To ask for payment of debts by contributory.
(ii) To make calls on contributory for payment of any necessary money for winding-up.
(iii) To adjust the rights of the contributories among themselves.
(iv) To make an order for the payment of the costs, charges and expenses of winding-up, out
of the assets of the company.
(v) To summon persons, including any officers, suspected of having in their possession any
property, etc. of the company.
(vi) Where the Company Liquidator has reported a fraud, then to order examination of
promoters, directors, etc.
(vii) Where the Tribunal is satisfied that a contributory or a person is having property, etc. of
the company in his possession, then to cause arrest of person trying to leave India or
abscond."

Ques.7 Explain dissolution of Company by Tribunal.

Ans. In this regard, the provisions of the Companies Act, 2013 may be discussed as follows:

1. Application to be filed by Company Liquidator for dissolution of company: Section

302 lays down that when the affairs of a company have been completely wound up, then
the Company Liquidator shall make an application to the Tribunal for dissolution of such
company.

2. To make order for dissolution: According to Section 302, on the application filed by
the Company Liquidator or when the Tribunal is of the opinion that it is just and
 reasonable in the circumstances of the case that an order for the dissolution of the
company should be made, then the Tribunal shall make an order that the company be
dissolved from the date of the order and the company shall be dissolved accordingly.
Then, within 30 days from the date of the order, a copy of the order shall be forwarded by
the Company Liquidator to the Registrar who shall record in the register relating to the
company a minute of the dissolution of the company. If Company Liquidator makes a
default in forwarding the copy of the order within the said specified period, then he shall
be punishable with fine which may extend to ₹ 5,000 for every day during which the
default continues.

3. Appeals from orders made before commencement of Companies Act, 2013: Section
303 lays down that the provisions of ‘winding-up’ (i.e., Chapter XX) shall not affect the
operation or enforcement of any order made by any Court in any proceedings for the
winding-up of a company immediately before the commencement of the Companies Act,
2013, and an appeal against such order shall be filed before such authority as competent
to hear such appeals before such commencement.

Ques.8 Explain the General powers of the Tribunal.

Ans. The Tribunal has been provided the following general powers under Section 295 to
301:
(i) To ask for payment of debts by contributory.
(ii) To make calls on contributory for payment of any necessary money for winding-up.
(iii) To adjust the rights of the contributories among themselves.
(iv) To make an order for the payment of the costs, charges and expenses of winding-up, out
of the assets of the company.
(v) To summon persons, including any officers, suspected of having in their possession any
property, etc. of the company.
(vi) Where the Company Liquidator has reported a fraud, then to order examination of
promoters, directors, etc.
(vii) Where the Tribunal is satisfied that a contributory or a person is having property, etc. of
the company in his possession, then to cause arrest of person trying to leave India or
abscond.

Ques.9 Explain the appointment of Official Liquidator and also explain the difference
between an Official Liquidator and a Company Liquidator.
Ans. Section 359 lays down that for the purpose of this Act, so far as it relates to the winding-up
of the companies by the Tribunal, the Central Government may appoint as many Official
Liquidators, Joint Deputy, or Assistant Official Liquidators as it may consider necessary to
discharge the functions of the Official Liquidator. The liquidators so appointed shall be whole-
time officers of the Central Government. The salary and other allowances of the Official
Liquidator, Joint Official Liquidator, Deputy Official Liquidator and Assistant Official
Liquidator shall be paid by the Central Government.
At this stage, it is important to understand the difference between an Official Liquidator and a
Company Liquidator. The Official Liquidator is appointed by the Central Government only in
the case of the winding-up of a company by the Tribunal. He is an officer of the Central
Government receiving salary from it. On the other hand, the Company Liquidator is appointed by
the Tribunal in case of winding-up of a company by the Tribunal, and he is appointed by the
company or its creditors in case of voluntary winding-up. The Company Liquidator is necessarily
appointed from a panel of professionals maintained by the Central Government for this purpose.
The Company Liquidator is in a way an expert executive hired for a fees by the company.

Ques.10 Explain the summary procedure for Liquidation.

Ans. Section 361 lays down that where the company to be wound up under the Chapter XX-
Winding-up’, (i) has assets of book value not exceeding ₹1 crore, and (ii) belongs to such class
or classes of companies as may be prescribed, then the Central Government order it to be wound
up by summary procedure. Rule 39 of the Companies (Winding-up) Rules, 2014, prescribes such
classes of companies as follows: (a) One Person Company, or (b) Small Company. The
summary procedure for liquidation may be described as follows:

1. Appointment of Official Liquidator: Where an order is made by the Central

Government that a company shall be wound up by summary procedure, then the
Central Government shall appoint the Official Liquidator as the liquidator of the
company.
2. Official Liquidator to take control of all assets: After his appointment, the
Official Liquidator shall forthwith take into his custody or control all assets,
effects (belongings) and actionable claims to which the company is or appears to
be entitled.
3. Report to be submitted to Central Government: Within 30 days of his
appointment, the official Liquidator shall submit a report to the Central
Government in such manner and form as may be prescribed, including a report
whether in his opinion any fraud has been committed in promotion, formation or
management of the affairs of the company or not.
4. Direction by Central Government for further investigation: On the receipt of
the said report from the Official Liquidator, if the Central Government is satisfied
that any fraud has been committed by the promoters, directors or any other officer
of the company, then it may direct further investigation into the affairs of the
company. It may also direct that a report of such further investigation shall be
submitted within such time as may be specified.
 5. Order for Winding-up: After considering the said investigation report, the
Central Government may order that Winding-up may be proceeded under
‘Winding-up by the Tribunal’ or under the provisions concerning ‘Official
Liquidators’.

Ques.11 Write a short note on:

1. Sale of Assets and recovery of debts due to company

2. Settlement of claims of Creditors by Official Liquidator
Ans.
1. Sale of Assets and recovery of debts due to company: In this regard, the following
steps shall be taken by the Official Liquidator as per Section 362:
 Disposal of the assets: The Official Liquidators shall expeditiously (efficiently,
without wasting time, money, etc.) dispose of all the assets whether movable or
immovable within 60 days of his appointment.
 Notice to deposit amount payable: The Official Liquidator shall serve a notice
within 30 days of his appointment calling upon the debtors of the company or the
contributories, as the case may be, to deposit within 30 days with him the amount
payable by them to the company.
 Order by Central Government on defaulter debtor: Where any debtor does not
deposit the amount payable by him to the company, then the Central Government on
an application made to it by the Official Liquidator, may pass such orders as it thinks
fit.
 Amount to be deposited into public account of India: The amount recovered from
the debtors or contributories by the Official Liquidator shall be deposited in such
manner and at such times as may be prescribed, into the Public Account of India in
the Reserve Bank of India.

2. Settlement of claims of Creditors by Official Liquidator: Section 363 lays down that
the Official Liquidator within 30 days of his appointment shall call upon the creditors of
the company to prove their claims in such manner as may be prescribed within 30 days of
the receipt of such call. Thereafter, the Official Liquidator shall prepare a list of claims of
creditors in such manner as may be prescribed. Then, he shall communicate to each
creditor about the claims accepted or rejected along with reasons therefor to be recorded
in writing.

Ques.12 Explain such cases when Company is deemed to be unable to pay its debts.
Ans. Section 271(2) lays down that a company shall be deemed to be unable to pay its debts
in the following cases:

1. Failure to pay a defined creditor: If a creditor to whom the company is indebted for an
amount exceeding 1 lakh becoming due for payment, has served on the company by
causing it to be delivered at its registered office by registered post or otherwise, a demand
requiring the company to pay the amount so due, but the company has failed to pay the
sum within 21 days after the receipt of such demand or to provide adequate security or to
re-structure or to compound (pay compensation for not prosecuting against) the debt to
the reasonable satisfaction of the creditor.
2. Execution on court’s decree fails: If any execution or other process issued on a decree
or order of any court or Tribunal in favour of a creditor, is returned unsatisfied in whole
or in part; or
3. Unable to pay contingent and prospective liabilities: If it is proved to the satisfaction
of the Tribunal that the company is unable to pay its debts and in determining whether a
company is unable to pay its debts the Tribunal shall take into account the contingent and
prospective (likely) liabilities of the company.

 Long Answer Type Questions:

Ques.1 Why winding-up of a Company by the tribunal?

Ans. The company may require to wound up by the tribunal under section 271 under the
following circumstances:

1. In case the company does not pay the debts, the debt of the creditor exceeding Rs 1 lakhs
is due and unpaid by the company within 21 days from the due date, or any execution
decree is passed in favour of the creditor or tribunal has a reason that company will not
pay off any debts then company would be liable for winding up.
2. In case a company has made the provisions by passing a special resolution that wound up
is made by the tribunal.
3. In case of sick companies if no revival and rehabilitation is done, then tribunal may order
for the winding up of a company.
4. In case the company is formed in a fraudulent manner, or it has reason to believe that the
activity of the business is conducted fraudulently then that company is liable to be wound
up by the tribunal.
 5. In case the formation of the company is for any unlawful purpose, or the management of
the company is guilty of misconduct or misfeasance, then winding up is necessary by the
tribunal.
6. In case the company fails to submit annual returns and financial statements of the last
five financial years continuously then the registrar made the company defaulter n liable
for winding up.
7. If the tribunal has the opinion that winding up of a company is necessary for the good
faith of the company.

Ques.2 What are the consequences of Winding-up?

Ans. Consequences of Winding-up: The most important consequences of the winding up of
a company are as follows-

 As Regards the Company Itself:

1. Winding up doesn’t take away the existence of the company completely.

2. The company continues to exist as a corporate entity till its dissolution.
3. All the ongoing business of the company is administered by the liquidator during the
phase of liquidation.

 As Regards the Shareholders:

1. Contributors – a new statutory liability comes into existence.

2. Every transaction of share during the liquefaction done without the approval of the
liquidator is termed void.

 As Regards the Creditors:

1. The creditors cannot file a case against the company except with the consent of the
court.
2. If the creditors already have decrees, they cannot proceed with the execution.
3. They must explain their claims and justify their claims to the liquidator.

 As Regards the Management:

1. With the appointment of the liquidator, all the powers of the directors, chief
executives and other officers tend to cease.
 2. Only the powers to give notice of resolution and the power of appointment of the
liquidator upon winding up of the company are given to the members.

 As Regards the Disposition of the Company’s Property:

1. All the dispositions of the company’s properties are void if the dispositions are not
approved by the court or the liquidator.

Ques.3 Explain the powers and duties of Company Liquidator.

Ans. Section 290 lays down that subject to direction by the National Company Law
Tribunal if any in this regard, the Company Liquidator shall have the following powers
(duties) in a winding-up of a company by the Tribunal:
1. To carry on the business of the company so far as may be necessary for the beneficial
Winding-up of the company.
2. To do all acts and to execute in the name and on behalf of the company all deeds,
receipts and other documents, and for that purpose, to use the Company’s seal when
necessary.
3. To sell the movable and immovable property and actionable claims of the company by
public auction or private contract, with power to transfer such property to any person or
body Corporate, or to sell the same in parcels.
4. To sell the whole of the undertaking of the company as a going concern.
5. To raise any money required on the security of the assets of the company.
6. To institute or defend any suit, prosecution or other legal proceeding, civil or criminal, in
the name and on behalf of the company.
7. To invite and settle claims of creditors, employees or any other claimant and distribute
sale proceeds in accordance with priorities established under this Act.
8. To inspect the records and returns of the company on the files of the Registrar or any
other authority.
9. To prove rank and claim in insolvency of any contributory for any balance against his
estate, and to receive dividends in the insolvency, in respect of that balance, as a separate
debt due from the solvent and rateably with the other separate creditors.
10. To draw, accept, make and endorse any negotiable instruments including cheque, bill of
exchange, hundi or promissory note in the name and on behalf of the company, with the
same effect with respect to the liability of the company as if such instruments had been
drawn, accepted, made or endorsed by or on behalf of the company in the course of its
business.
11. To take out in his official name letters of administration to any deceased contributory,
and to do in his official name any other act necessary for obtaining payment of any
money due from a contributory or his estate which cannot be conveniently done in the
name of the company and in all such cases the money due shall be deemed to be due to
 the Company Liquidator himself, for the purpose of enabling the Company Liquidator to
take out the letters of administration or recover the money.
12. To obtain any professional assistance from any person or appoint any professional in
discharge of his duties, obligations and responsibilities, and for protection of the assets of
the company appoint an agent to do any business which the Company Liquidator is
unable to do himself.
13. To take all such action, steps or to sign, execute and verify any paper, deed, document,
application, petition, affidavit, bond or instrument as may be necessary (i) for winding-up
of any company, (ii) for distribution of assets, (iii) in discharge of his duties and
obligations and functions as company liquidators, and (iv) to apply to the Tribunal for
such orders or directions as may be necessary for the winding-up of the company.
The exercise of above powers by the Company Liquidator shall be subject to the overall control
of the Tribunal. In spite of the provision the Company Liquidator shall perform such other duties
as the Tribunal may specify in this behalf.

Ques.4 Explain the provisions applicable to every mode of winding-up.

Ans. The following provisions of Chapter XX: ‘Winding-up’, Part III, of the Companies
Act, 2013, are applicable to both types of winding-up, that is, (i) winding-up by the
Tribunal, and (ii) voluntary winding-up.

1. Debts: Debts of all descriptions shall be admitted to proof against the company. (Section
324)
2. Insolvent company: In winding-up of an insolvent company, the same rules shall prevail
and be observed with regard to (a) debt provable, (b) the valuation of annuities and future
and contingent liabilities, and (c) the respective rights of secured and unsecured creditors,
as are in force the time being under the law of insolvency with respect to the estates of
persons adjudged insolvent. The secured creditors, workmen, etc. shall be entitled to
prove and receive dividends out of the assets of the company under winding-up. (Section
325)
3. Overriding preferential payments: In the winding-up of a company: (a) workmen’s
dues, and (b) and debts due to secured creditors shall be paid in priority to all other debts.
(Section 326)
4. Preferential payments: In winding-up, subject to the priority payment of the said
‘overriding preferential payments’, the ‘preferential payments’ shall be paid in priority to
all other debts. Such ‘preferential payments’ shall include revenues and taxes due to
Government, wages and salary of any employee, workmen’s compensation, all sums due
to an employee from Provident Fund, Pension Fund and Gratuity Fund or any other
employees’ welfare Fund, and any expenses of investigation carried out into the affairs of
the company. (Section 327)
 5. Fraudulent preference: Where the Tribunal is satisfied that the company has given a
fraudulent preference to any creditor or surety or guarantor for any debt or other liability
of the company, then it may order as it thinks fit for restoring the position to what it
would have been in if such fraudulent preference had not been given. (Section 328)
6. Transfer not in good faith to be void: Any transfer of movable or immovable property
or any delivery of goods, not made by the company in the ordinary course of its business,
or in good faith and for valuable consideration, shall be void against the company
liquidator. (Section 329)
7. Certain transfers to be void: Any transfer or assignment by a company of all its
properties or assets to trustees for the benefit of all its creditors shall be void. (Section
330)
8. Effect of floating charge: A floating charge on the undertaking or property of the
company within 12 months immediately preceding the commencement of the winding-up
shall be invalid unless it is proved that the company immediately after the creation of the
charge was solvent. (Section 332)
9. Statement that company is in liquidation: Where a company is being wound up
whether by the Tribunal or voluntarily, then every notice, order for goods or business
letter issued by or on behalf of the company or the Company Liquidator, or a receiver or
manager of the property of company, shall contain a statement that the company is being
wound up. (Section 344)
10. Filing a statement of position of liquidation Information in relation to liquidation: If
the winding-up of the company not concluded within one year after its commencement,
then the Company Liquidator shall file in the prescribed form a duly audited “Statement
with Respect to Proceedings in and Position of the Liquidation” within 2 months of the
expiry of such year, and thereafter at intervals of not more than one year or at such
shorter intervals as may be prescribed, until the winding-up is concluded. (Section 348)

Ques.5 Explain the procedure of Voluntary winding-up.

Ans. In case of voluntary winding-up, the Companies Act, 2013 mentions the following
procedure:

I. Declaration of solvency in case of proposal to wind up voluntarily: Section 305 lays

down that where it is proposed to wind up a company voluntarily, then its director or
directors, or in case the company has more than 2 directors then majority of its directors
shall make at a meeting of the Board a declaration verified by an affidavit to the effect
that they have made a full enquiry into the affairs of the company and they have formed
an opinion that the in full proceeds (money) of assets sold in voluntary winding-up.
II. Meeting of creditors: Section 306 lays down that along with calling of meeting of the
company at which the resolution for the voluntary winding-up is to be proposed, the
company shall cause a meeting of its creditors either on the same day or on the next day.
 For this purpose, the company shall cause a notice of such meeting to be sent by
registered post to the creditors with the notice of the meeting of the company for passing
a resolution requiring the company to be wound up voluntarily.
At the above meeting, the Board of Directors of the company shall take two steps: (a)
The Board shall cause to be presented a full statement of the position of the affairs of the
company together with a list of creditors of the company, a copy of declaration of
solvency (under Section 305 above), and the estimated amount of the claims before such
meeting; and (b) the Board shall appoint one of the directors to preside at the meeting.
At the meeting, if 'two-thirds in value' of creditors of the company are of the opinion that
it is in the interest of all parties that the company be wound up voluntarily, then the
company shall be wound up voluntarily. However, if they are of the opinion that the
company may not be able to pay for its debts in full from the proceeds (money) of assets
sold in voluntary winding-up and therefore they pass a resolution that it shall be in the
interest of all parties if the company is wound up by the Tribunal in accordance with the
provisions of ‘winding-up by the Tribunal' , then the company shall file an application
before the Tribunal within 14 days after passing such resolution. The notice of any
resolution passed at the meeting of creditors as above shall be given by the company to
the Registrar within 10 days of the passing thereof.
III. Publication of Resolution to Wind-up voluntarily: Section 307 lays down that where a
company has passed a resolution for voluntary winding-up and a resolution by the
creditors is passed (as discussed in point II above), then with 14 days of the passing of the
resolution, the company shall give notice of the resolution by advertisement in the
Official Gazette and also in a newspaper which is in circulation in the district where the
registered office or the principal office of the company is situated.
IV. Commencement of Voluntary Winding-up: According to Section 308, a voluntary
winding-up shall be deemed to commence on the date of passing of the resolution for
voluntary winding-up.
Effect of Voluntary Winding-up: Section 309 provides that in the case of a voluntary
winding-up, the company shall cease to carry on its business from the commencement of
the winding-up, except as far as required for the beneficial winding-up of its business.
However, the corporate state and corporate powers of the company shall continue until it
is dissolved.
V. Appointment of Company Liquidator: Virtually this is the last step to be taken in the
process of winding-up. However, it includes many sub-steps as follows:
 Appointment of Company Liquidator in general meeting: Section 310 lays down that
where a resolution of voluntary winding-up has been passed, then the company shall
appoint a Company Liquidator in its general meeting from the panel prepared by the
Central Government for the purpose of winding up its affairs and distributing the assets
of the company. The company shall also recommend the fee in the general meeting to be
paid to the Company Liquidator. Where the creditors have passed a resolution for
winding-up the company (as mentioned under point II above), then the appointment of
the Company Liquidator shall be effective only after it is approved by the 'majority of
creditors in value’ of the company. However, where such creditors do not approve the
 appointment of such Company Liquidator, then creditors shall appoint another Company
Liquidator.
 Power to remove and fill vacancy of Company Liquidator: Section 311 lays down
that the appointed Company Liquidator may be removed by the company where his
appointment has been made by the company. However, if his appointment is approved or
made by creditors, then he may be removed by such creditors. Where a Company
Liquidator is sought to be removed, then he shall be given a notice in writing stating the
grounds of removal from his office by the company or the creditors, as the case may be.
 Notice of appointment of Company Liquidator to be given to Registrar: Section 312
lays down that the company shall give notice to the Registrar of the appointment of a
Company Liquidator along with the name and particulars of him, of every vacancy
occurring in the office of Company Liquidator, and of the name of the Company
Liquidator to fill every such vacancy within 10 days of such appointment or the
occurrence of such vacancy.
 Cessation of Board’s powers on appointment of Company Liquidator: Section 313
lays down that on the appointment of a Company Liquidator, all the powers of the Board
of Directors and of the Managing and Whole-time Directors and Manager shall cease,
except for the purpose of giving notice of such appointment of the Company Liquidator
to the Registrar.
 Powers and Duties of Company Liquidator in voluntary winding-up: Section 314
lays down the following powers and duties of the Company Liquidator after his
appointment by the company or the creditors:
(i) To perform functions assigned to him by company or creditors: The
Company Liquidator shall perform such functions and discharge such duties as
may be determined from time to time by the company or the creditors.
(ii) To prepare list of contributories: The Company Liquidator shall settle the list of
contributories, which shall be prima facie (at first sight) evidence of the liability
of the persons named therein to be contributories.
(iii) To call general meetings: The Company Liquidator shall call general meetings
of the company for the purpose of obtaining the sanction of the company by
ordinary or special resolution as the case may require, or for any other purpose
that he may consider necessary.
(iv) To maintain books of accounts: The Company Liquidator shall maintain regular
and proper books of account in such form and in such manner as may be
prescribed. The members and creditors and any officer authorised by the Central
Government may inspect such books of account.
(v) To prepare quarterly statements of accounts: The Company Liquidator shall
prepare quarterly statements of accounts in such form and manner as may be
prescribed and file such statement of accounts duly audited within 30 days form
the close of each quarter with the Registrar. If he fails in doing so, then he shall be
punishable with fine which may extend to ₹ 5,000 for every day during which the
failure continues.
 (vi) To pay debts, and adjust rights of contributories: The Company Liquidator
shall pay the debts of the company and shall adjust the rights of the contributories
among themselves.
(vii) To discharge duties with care and diligence: The Company Liquidator shall
observe due care and diligence in the discharge of his duties.
 Appointment of Committees: Section 315 lays down that where there are no creditors
of a company then such company in its general meeting, and where a meeting of creditors
is held as per requirements of Section 306 (mentioned at no. II above) then such
creditors, as the case may be, may appoint such committees as considered appropriate by
them to supervise the voluntary liquidation and assist the Company Liquidator in
discharging his functions.
 Company Liquidator to submit report on progress of winding-up: Section 316 lays
down that the Company Liquidator shall report quarterly on the progress of winding-up
of the company in such form and in such manner as may be prescribed to the members
and creditors. He shall also call a meeting of the members and the creditors as and when
necessary but at least one meeting each of creditors and members in every quarter and
apprise them of the progress of the winding-up of the company in such form and in such
manner as may be prescribed.
 Report of Company Liquidator to Tribunal for examination of persons: Section 317
lays down that where the Company Liquidator is of the opinion that a fraud has been
committed by any person in respect of the company, then he shall immediately make a
report to the National Company Law Tribunal and the Tribunal shall, without prejudice to
the process of winding-up, order for investigation under Section 210. On consideration of
the report of such investigation, the Tribunal may pass such order and give such
directions as it may consider necessary including the direction that such person shall
attend before the Tribunal on a day appointed by it for that purpose. Then, such person
shall be examined by the Tribunal in relation to the promotion, formation or the conduct
of the business of the company or in relation to his conduct and dealings as officer
thereof or otherwise. The provisions of Section 300 shall mutatis mutandis (with
necessary changes having been made) apply in relation to the aforesaid examination.
 Final meeting and dissolution of company: Section 318 lays down that as soon as the
affairs of a company are fully wound up, the Company Liquidator shall prepare a report
of winding-up and call a general meeting of the company to pass a resolution for
dissolution. After considering the said report, the Tribunal shall pass an order for
dissolution of the company, which shall be filed with the Registrar who shall forthwith
publish a notice in the Official Gazette that the company is dissolved. Section 320
provides that on its winding-up, the assets of a company shall be applied in satisfaction of
its liabilities pari passu (on an equal footing) and subject to such application, shall be
distributed among members according to their rights and interest in the company unless
the Articles otherwise provide.

Ques.6 Explain:
 1. Company Liquidators and their appointment
2. Jurisdiction of Tribunal
3. Advisory Committee
4. Submission of Report by Company Liquidator
Ans.
1. Company Liquidators and their appointment: In this regard, Section 275
lays down that for purposes of winding-up of a company by the Tribunal, the
Tribunal at the time of passing the order of winding-up, shall appoint an
official liquidator or a liquidator from the panel maintained by the Central
Government. Such panel contains the names of chartered accountants,
advocates, company secretaries, cost accountants and such other professionals
as may be notified by the Central Government, who have at least 10 years’
experience in company matters. A provisional liquidator may be appointed by
the Tribunal, if so, then Tribunal may limit and restrict his powers by the
order appointing him, but otherwise he shall have the same powers as a
liquidator.
2. Jurisdiction of Tribunal: According to Section 280, the Tribunal shall have
jurisdiction to entertain or dispose of: (a) any suit or proceeding by or against
the company; (b) any claim made by or against the company, including claims
by or against any of its branches in India; (c) any application made under
Section 233, in regard to a scheme of merger or amalgamation; (d) any
scheme submitted under Section 262, in regard to revival and rehabilitation,
for approval (sanction); (e) any question of priorities or any other question
whatsoever whether of law or facts, including those relating to assets,
business, actions, rights, entitlements, privileges, benefits, duties,
responsibilities, obligations or in any matter, arising out of, or in relation to,
winding-up of the company.
3. Advisory Committee: According to Section 287, while passing an order of
winding-up of a company, the Tribunal may direct that there shall be an
Advisory Committee to advise the Company Liquidator and to report to the
Tribunal on such matters as the Tribunal may direct. Such Advisory
Committee shall consist of maximum 12 members who shall be creditors and
contributories of the company or such other persons in such proportion as the
Tribunal may direct keeping in view the circumstances of the company under
liquidation. The Company Liquidator shall convene a meeting of creditors and
contributories, as ascertained from the books and documents of the company,
within 30 days from the date of order of winding-up for enabling the Tribunal
to determine the persons who may be members of the Advisory Committee.
The Advisory Committee shall have the right to inspect the books of account
and other documents, assets and properties of the company under liquidation
 at a reasonable time. The provisions relating to the convening of the meetings,
the procedure to be followed thereat, and other matters relating to conduct of
business by the Advisory Committee shall be such as may be prescribed. The
meeting of Advisory Committee shall be chaired by the Company Liquidator.
4. Submission of report by Company Liquidator: Section 281 lays down that
where the Tribunal has made a winding-up order or appointed a Company
Liquidator, such liquidator shall submit to the Tribunal within 60 days from
the order a report containing the following particulars:
(a) The nature and details of the assets of the company including their
location and values, stating separately the cash balance in hand and
in the bank and the negotiable securities held by the company.
However, the valuation of the assets shall be obtained from
registered valuers for this purpose;
(b) Amount of capital issued, subscribed and paid-up;
(c) The existing and contingent liabilities including names, addresses
and occupations of its creditors, stating separately the amount of
secured and unsecured debts, and in case of secured debts,
particulars of the securities given whether by the company or an
officer thereof, their value and the dates on which they were given;
(d) The debts due to the company and the names, addresses and
occupations of the persons from whom they are due and the amount
likely to be realised on account thereof;
(e) Guarantees extended by the company;
(f) List of contributories and dues payable by them and details of any
unpaid calls;
(g) Details of trade marks and intellectual properties owned by the
company;
(h) Details of subsisting contracts, joint ventures and collaborations;
(i) Details of holding and subsidiary companies;
(j) Details of legal cases filed by or against the company; and
(k) Any other information which the Tribunal may direct or the
Company Liquidator may consider necessary to include.
The Company Liquidator shall include in his report, the manner in
which the company was promoted or formed and whether in his opinion
any fraud has been committed by any person in its promotion or
formation or by any officer of the company in relation to the company
since the formation thereof and any other matters which, in his opinion,
it is desirable to bring to the notice of the Tribunal.
The Company Liquidator shall also make a report on the viability of the
business of the company or the steps which, in his opinion, are necessary
for maximising the value of the assets of the company. He may also
make any further report or reports if he thinks fit.
Ques.7 Explain the procedure for Compulsory Winding up by the tribunal?
Ans. Mentioned below is the procedure for filing compulsory winding up:
1. Filing of petition in Form WIN-1 or WIN-2 by the Eligible Petitioner:

Eligible petitioners shall file the petitions in the following manner:

a) For the purposes of sub-section (1) of section 272, a petition for winding up of a
company shall be presented by the eligible petitioner in Form WIN-1 or WIN-2.In case
when the petition presented by the Company, then it shall be presented in the Form WIN-
2 and in other cases in Form WIN-1.

b) Every petition shall he verified by an affidavit made by the petitioner or by the

petitioners, where there are more than one petitioners, and in case the petition is
presented by a body corporate, by the Director, Secretary or any other authorised person
thereof, and such affidavit shall be in FormWIN-3.

c) Statements of Affairs must be annexed along with petition in Form WIN-4which shall
contain the information up to the date, which shall not exceed thirty days prior to the date
of filling the petition duly verified by an affidavit in Form WIN-5.

2. Service of Petition: Every contributory of the Company shall be entitled to be furnished

by the petitioner or by his authorised representative with a copy of the petition within 24
hours of the requisition made by the contributory on payment of five rupees per page.

3. Advertisement of Petition: The Petition shall be advertised atleast 14 days before the
date fixed for hearing by the Tribunal in Form WIN-6 in any daily newspaper in English
and vernacular language widely circulated in the State or Union territory in which the
registered office of the company is situated.

Further, an application for leave to withdraw a petition for winding up which has been
advertised shall not be heard at any time before the date fixed in the advertisement for the
hearing of the petition. Withdrawal of petitionis only allowed upon adherence to order of
Tribunal, including costs and it shall be advertised in the same manner as the original
petition.

4. Appointment of Company Liquidator (“CL”) or Provisional Liquidator (“PL”):

The process to appoint a Company or Provisional Liquidator is mentioned below:

a) After the admission of a petition for the winding up of a company by the Tribunal, and
upon proof by affidavit of sufficient ground for the appointment of a provisional
liquidator, the Tribunal, if it thinks fit, and upon such terms and conditions as in the
 opinion of the Tribunal shall be just and necessary, may appoint a provisional liquidator
of the company, pending final orders on the winding up petition, and where the company
is not the applicant, notice of the application for appointment of provisional liquidator
shall be given to the company in Form WIN 7 and the company shall be given a
reasonable opportunity to make its representation unless the Tribunal, for reasons to be
recorded in writing, dispenses with such notice.

b) As per Section 275, Company Liquidator (CL) shall be appointed by the Tribunal
amongst the Insolvency Professionals registered under the Insolvency and Bankruptcy
Code, 2016.

c) Notice of appointment of CLby Tribunal shall be made to the liquidator within 7 days
in form WIN-9.

d) The declaration disclosing conflict of interest in Form WIN-10 within7 days of his
appointment by CL.

5. Order of Winding up by the Tribunal:

The following methodology is prescribed for receipt and filing of the order:

a) For the purposes of sub section (1) of section 277, the order for winding up shall be in
Form WIN-11.

b) The Tribunal shall send the signed and sealed order of winding up within 7 days from
the date of receipt of the order by the Registrar, to CL in Form WIN-12 and to ROC in
Form WIN-13.

c) A copy of the order made by the Tribunal shall also be filed by the liquidator within
thirty days of the receipt with the Registrar of Companies in form INC-28 of the
Companies (Incorporation) Rules, 2014 within 30 days of the date of order.

d) Contents of the Winding up Order: An order for winding up a company shall inter-alia
contain that it will be the duty of such of the persons as are liable to submit the books of
account of the company completed and audited up to the date of the order, to attend on
the Company Liquidator at required time and place and give him all the information, and
it will be the duty of every person who is in possession of any property, books or papers,
cash or any other assets of the company, including the benefits derived therefrom, to
surrender forthwith such property, books or papers, cash or other assets and the benefits
so derived , as the case may be, to the CL.

6. Advertisement of Winding up order: The order for the winding up of a company by the
Tribunal shall, within 14days of the date of the order be advertised by the petitioner in a
 newspaper in the English language and a newspaper in vernacular language widely
circulating in the State or the Union territory where the registered office of the company
is situated and shall be served by the petitioner upon such person, if any, and in such
manner as the Tribunal may direct, and the advertisement shall be in Form WIN 14.

7. Power of CL upon winding up order:

On winding up order being made, the following powers can be exercised by CL:

a) CL shall take charge of assets and books of accounts and papers of the Company.

b) The CL can file an application against the promoters/directors of the Company if they
do not cooperate in giving the charge of assets and books of accounts of the Company.

c) The CL may make an application before Tribunal thereby seeking direction up on any
contributory/ trustee etc. to pay such sum to which the Company is entitled.

8. Reports by the CL:

As per sub section (1) of Section 281 of the Act, the CL shall submit report to the
Tribunal in following manner:

a) The CL shall file first Report within 60 days of order in form WIN-16 reporting nature
and details of asset of the Company, debts due, guarantees, list of contributories and their
dues, subsisting contracts etc. Further, as per sub section (4) of Section 281 of the Act,
CL may make further report or reports, if he thinks fit to the Tribunal.

b) The Tribunal shall within 7 days from the receipt of such report, fix a date for the
consideration and notify the date on the notice board of the Tribunal and to the CL.

9. Settlement of list of contributories: Sec 285 read with Rule 28 to 35

a. Preparation of provisional list of contributories (Rule 28): Unless the Tribunal

dispenses with the settlement of a list of contributories, the CL shall prepare the list of
contributories within 21 days of the winding up order. The list shall consist the name of
every person who was a member on commencement on winding up or his representative
and the list shall be in Form WIN-17.

b. Notice of Settlement (Rule 29): Upon the filing of the provisional list of
contributories mentioned in Rule 28 above, CL shall do the following functions:

 The CL shall obtain a date from the Tribunal for settlement of the list of
contributories.
 The CL shall give notice of the date appointed by the Tribunal to every person
included in the list form WIN-18.
 Further, if any person intends to object to his being settled as a contributory in
such case he should file in Tribunal, at least 2 days before the hearing, his
affidavit in form WIN-19 in support of his contention and serve a copy of the
same on the CL.
c. Settlement List (Rule 30): On the date appointed for the settlement of the list
referred to in rule 29, the Tribunal shall hear any person who objects to being settled
as a contributory or as a contributory in such character or for such number of shares
or extent of interest as is mentioned in the said list, and after such hearing, shall
finally settle the list in accordance with sub-section (1) of section 285 and the
aforesaid list when settled shall be certified by the Tribunal under its seal and shall be
in Form WIN 20.
d. Notice of settlement to contributories (Rule 31): Upon the receipt of the settled
list of contributories, as certified by the Tribunal in terms of rule 30, the CL shall
within a period of 7 days issue notice to every person placed on the said list of
contributories in form WIN 21 and shall be sent to each person settled on the said list
by pre-paid registered post or speed post at the address mentioned in the said list and
an Affidavit confirming the service of notice in form WIN-22.
e. Supplemental list (Rule 32): The Tribunal may add to the list of contributories by
a supplemental list or lists and any such addition shall be made in the same manner in
all respects as the settlement of the original list.
f. Variation of list (Rule 33): Save as provided in rule 31, the list of contributories
shall not be varied, and no person settled on the list as a contributory shall be
removed from the list, or his liability in any way varied, except by order of the
Tribunal and in accordance with such order.
g. Application for rectification of list (Rule 34): If after the settlement of the list of
contributories, the Company Liquidator has reason to believe that a contributory who
had been included in the provisional list has been improperly or by mistake excluded
or omitted from the list of contributories as finally settled or that the character in
which or the number of shares or extent of interest for which he has been included in
the list as finally settled or any other particular contained therein, requires
rectification. Then the CL can make application for rectification in the list even after
the settlement.
h. List of Contributories consisting of past members (Rule 35): It shall not be
necessary to settle a list of contributories consisting of the past members of a
company, unless so ordered by the Tribunal and where an order is made for settling a
list of contributories consisting of the past members of a company, the provisions of
these rules shall apply to the settlement of such list in the same manner as they apply
to the settlement of the list of contributories consisting of the present members.
10. Advisory Committee: The Tribunal may direct for constitution of an Advisory
Committee and determine the persons who may be the members of the advisory
committee. The meeting of the creditors and contributories in accordance with the
provisions of sub-section (3) of section 287 to determine the persons who may be the
members of the advisory committee shall be convened, held and conducted in the manner
provided in the prescribed rules for the holding and conducting of meeting of creditors
and contributories.

11. Meeting of creditors and contributors (Rule 44 – 65):

Subject to any directions given by the Tribunal, rules as hereinafter set out shall apply to
meetings of creditors and contributories as may be convened in pursuance of sub-section
(3) of section 287 and sub-section (3) of section 292.

a. Notice of Meeting:

The provisions of sending notice of the meeting of creditors and contributories by CL is

stipulated below:

 The CL shall summon meetings of creditors and contributories by giving at least

14 days’ notice by sending individually to every creditor of the company a notice
of the meeting of creditors, and to every contributory of the company a notice of
the meeting of contributories. The notice of the meeting required to be sent not
less than 14 days before the date fixed for the meeting.
 Where creditors and contributors are more than 500, the notice to be sent by way
of newspaper advertisement shall begiven in Form WIN-25.
 The CL or any other person nominated by him shall be the Chairman and the
nomination shall be given in WIN-32.
 Notice of the meeting shall be given in form WIN-30. The CL may, at its
discretion can give notice to the officers of the Company.
 Proof of notice shall be submitted by way of an Affidavit in form WIN-31.
b. Resolution at Creditors or Contributory meeting: Resolution shall be deemed to be
passed when majority in value of the contributories present personally or by proxy and voting
has been made in favour of the resolution.
c. Quorum: The Quorum shall be at least three creditors or contributories entitled to vote
and where total creditors or contributors do not exceed 3, then all creditors or contributors
entitled to vote.
d. Minutes of proceedings:
The chairman of the meeting shall cause minutes of the proceedings at the meeting in the
following manner:
  Minutes to be drawn up and fairly entered in the Minute Book within 30 days and the
minutes shall be signed by him or by the chairman of the next meeting.
 A list of creditors and contributories present at every meeting shall be made and kept
in Form WIN 33.
 The Company Liquidator shall, within seven days of the conclusion of the meeting,
report the result thereof to the Tribunal in Form No. WIN 34.

12. Examination of Promoters or Directors u/s 299 And 300 read with rule 139 to 154:

The process of examination of Promoters or Directors is mentioned below:

a) Where CL made a report stating fraud by the promoters/ directors of the Company:
Tribunal may after considering the report, direct that such person or officer shall attend
before the Tribunal on an appointed day for examination as to the promotion or formation
or the conduct of the business of the company or as to his conduct and dealings as an
officer thereof.

b) Issue of summons against the directors or promoters: Tribunal may, upon hearing,
make an order for issuing summons against persons named in the order in form WIN-62
and Summon shall be in form WIN- 63.

c) Order directing examination shall be in form WIN-64 and shall be made at least 7 days
prior to date fixed for hearing. No person shall take part in examination except CL and
his Authorised Representative.

13. Sale by Company Liquidator:

The process of sale of asset or property of the Company can be made by the CL, post
taking previous sanction of the Tribunal. The procedure of sale is mentioned below:

a) Every sale shall be held by the CL, or, if the Tribunal shall so direct, by an agent or an
auctioneer approved by the Tribunal, and subject to such terms and conditions, if any, as
may be approved by the Tribunal and all sales shall be made by public auction or by
inviting sealed tenders or by electronic bidding or in such manners as the Tribunal may
direct.

b) Where property forming part of a company’s assets is sold by the Company Liquidator
through an auctioneer or other agent, the gross proceeds of the sale shall, unless, the
Tribunal otherwise orders, be paid over to the liquidator by such auctioneer or agent and
the charges and expenses connected with the sale shall afterwards be paid to such
auctioneer or agent in accordance with the scales, if any, fixed by the Tribunal.

14. Termination of winding up:

 The process of conclusion of winding up of the affairs of the Company is mentioned
below:

a) When all affairs have been fully wound up, CL shall file application for dissolution
within 10 days along with audited financial accounts & auditor’s certificate.

b) Upon application filed, Tribunal shall in consideration of accounts and auditor’s

certificate, pass an order of dissolution.

c) Liquidator shall pay the balance into Company Liquidation Dividend and
Undistributed Assets Account any unclaimed dividends payable to creditors or
undistributed assets refundable to contributories in his hands on the date of the order of
dissolution, and such other balance in his hands.

d) The winding up of a company shall, for purposes of section 302, be deemed to be

concluded at the date on which the order dissolving the company has been reported by
the Company Liquidator to the Registrar of Companies unless any fund or assets of the
company remaining unclaimed or undistributed in the hands or under the control of the
Company Liquidator, have been distributed, or paid into the Company Liquidation
Dividend and Undistributed Assets Account as provided in section 352.

 Multiple Choice Question:

1. The Registrar of Company can approach the central government to accord sanction
to present a petition to the tribunal if financial statements are defaulted for a
period:

A. Two consecutive years

B. Four consecutive years
C. Five Consecutive Years
D. Any Five years

2. Who are the persons who can file petition for winding up of the company:

A. Company & its Contributories

B. The Central Government or State Government
C. Registrar on his own account
D. Both A and B
3. When a petition for winding up is made to tribunal, the tribunal shall pass its order
within:

A. 90 Days
B. 190 Days
C. 270 Days
D. 360 Days

4. When petition for winding up has been filed before the tribunal In how many days
should the Company file its objections and Statement of Affairs by an order of the
Tribunal:

A. 15 days
B. 30 days
C. 45 days
D. 60 days

5. Voluntary winding up:

A. If period fixed for the company is expired.

B. If company passes a special resolution the company wound up voluntarily.
C. Members voluntary winding up is applicable to solvent companies only.
D. All of the above

6. Compulsory winding up:

A. If a company unable to pay its debt

B. If the number of members of company reduced below statutory limit.
C. If a company does commence its business within a year from its incorporation.
D. All of the above

7. The first item in order of payment to be made by liquidator is:

A. Secured creditors
B. Preferential creditors
C. Liquidation expenses
D. Preferential creditors

8. A contributory is:

A. A creditor
B. A shareholder
C. A debenture holder
 D. A convertible debenture holder

9. A past member is not liable to contribute:

A. In respect of any liability contracted after he ceased to be member of the company.

B. One year passed since he ceased to be a member.
C. In case of company limited by shares, no liability arises if shares are fully paid up.
D. All of the above

10. Which of the followings are the modes of winding up?

A. Voluntary winding up (Under IBC Code 2016)

B. Compulsory winding up by tribunal
C. Both A & B
D. None of the above

11. Which of the following are grounds for compulsory winding up?

A. Default in filling p/l account and b/s or annual return

B. Inability to pay debts
C. Fraudulent affairs
D. All of the above

12. Which of the following are considered to just and equitable ground for winding up
of a company?

A. Deadlock in management
B. Oppression of minority
C. Quasi partnership
D. All of the above

13. Which of the following cannot file a petition for winding up?

A. The company
B. Contributory
C. The Registrar
D. Promoters of company

14. Which of the following can file a petition for winding up?

A. The company
B. Any creditor or prospective creditors
 C. The person authorized by the central government
D. All of the above

15. Official liquidators are appointed from a panel of:

A. Firms of chartered accountant

B. Lawyers
C. Cost accountant and company secretaries
D. All of the above

16. Official liquidator is appointed by the:

A. Central government
B. Tribunal
C. Creditors
D. Company

17. Power of removal of official liquidator vests with:

A. Central government
B. Tribunal
C. Creditors
D. Company

18. Which of the following is not the duty of a liquidator?

A. To take over company's assets for realization

B. To submit report to the tribunal
C. To keep proper books and submit accounts
D. None of the above

19. The order of dissolution can be issued only by the:

A. Central government
B. Tribunal
C. Creditors
D. Company

20. The report on profess of winding up has to be submitted by company liquidator to

the tribunal:

A. Monthly
B. Quarterly
 C. Half yearly
D. Yearly

21. At the time of commencement of liquidation proceedings Shareholders of the

company are known:

A. Legal heirs
B. Contributory
C. Preferential creditors
D. None of the above

22. When winding up takes place shareholders are described as:

A. Legal heirs
B. Contributory
C. Preferential creditors
D. Creditors

23. The petition of a compulsory winding-up of a company shall be made to:

A. Registrar of companies
B. Central Government
C. National Company Law Tribunal
D. High Court

24. Closing down or finishing a company is called:

A. Insolvency
B. Dissolution
C. Winding-up
D. None of these

25. Termination of the legal existence of a company is called:

A. Winding-up
B. Insolvency
C. Dissolution
D. None of these

26. Who of the following persons cannot present a petition for winding-up of a company
under the Companies Act:

A. Creditors
 B. Contributories
C. Workers
D. Registrar

27. The compulsory winding-up is deemed to commence at the time of the:

A. Presentation of the petition

B. Passing of winding-up resolution by the company
C. Issuing of order by High Court
D. None of these

28. To whom the Tribunal Communicates its order for compulsory winding-up of a
company:

A. Managing Director
B. Manager
C. Official Liquidator
D. Central Government

29. Who conducts the winding-up proceedings of a company:

A. The Registrar
B. The Central Government
C. The Liquidator
D. The Tribunal

30. Who has to notify the Tribunal's winding-up order in the Official Gazette:

A. The Registrar
B. The Company
C. The Central Government
D. The Tribunal

31. Who can present a petition for compulsory winding-up of a company:

A. The Company
B. The Registrar
C. The Central Government
D. All of these

32. In which of the following circumstances a company may be wound up by the

Tribunal:
 A. If default is made in holding the statutory meeting
B. If the company suspends its business for a whole year
C. If the company is unable to pay its debts.
D. All of these

33. In case of compulsory winding-up, the Official Liquidator is appointed by:

A. The Tribunal or Central Government

B. The members in general meeting
C. The Registrar of companies
D. The High Court

34. In case of a voluntary winding-up, who has to call the final general meeting of the
company:

A. The Registrar
B. The member
C. The liquidator
D. The Tribunal

 Answers:

1. C
2. D
3. A
4. B
5. D
6. D
7. C
8. B
9. D
10. C
11. D
12. D
13. D
14. D
15. D
16. B
17. B
18. D
19. B
20. B
21. B
22. B
23. D
24. C
25. C
26. C
27. B
28. C
29. C
30. A
31. D
32. D
33. A
34. C