Upload
vijayalakshmi-urs
View
225
Download
0
Embed Size (px)
Citation preview
8/7/2019 Companyies Act, 1956
1/80
COMPANIES ACT, 1956The word company ordinarily means an association of a number ofpersons for some common purpose. In its legal form a company is anartificial person created by law.
Section 3(1) (i) of the companies Act ,1956 defines a company as,A company formed ,and registered under this act or an existing
company. An existing company means a company formed andregistered under any of the former companies Act. This definition doesnot give the meaning of company.
Haneys brief definition bring out clearly many of thecharacteristics of a company. He defines, A company is anincorporated association which is an artificial person created by law,having a separate entity with a perpetual succession and a commonseal.
From the above it could be understood that a company is avoluntary association of person formed for some purpose with capitaldivided into parts known as shares which are freely transferable andwith a limited liability. It is an artificial person created by law withperpetual succession and a common sea.
8/7/2019 Companyies Act, 1956
2/80
ESSENTIAL CHARACYERISTICS
OF A COMPANY Registration and Legal Entity
Limited Liability
Separate Property Perpetual Succession
Common Seal
Transferability of Shares
Capacity to sue and be used
8/7/2019 Companyies Act, 1956
3/80
KINDS OF COMPANIES
I On the Basics of Incorporation
Charted Companies
Statutory Companies Registered Companies
Licenced Companies
Foreign Companies
8/7/2019 Companyies Act, 1956
4/80
II On the Basis of Liability
Companies with Limited Liability
Companies Limited by Guarantee Unlimited Companies
8/7/2019 Companyies Act, 1956
5/80
III On the Basis of Number of Members
Private Company
Public Company
8/7/2019 Companyies Act, 1956
6/80
IV On the Basis of Control
Holding Companies
Subsidiary Companies
8/7/2019 Companyies Act, 1956
7/80
V On the Basis of Ownership
Government Company
Foreign Company
8/7/2019 Companyies Act, 1956
8/80
Privileges & Exemptions
Enjoyed by Private Companies A private company can be registered with a minimum
of two members.
It is entitled to commence business immediately afterincorporation.
It is not required to issue a prospectus It is not required to hold a statutory meeting.
It can processed to allot shares before minimumsubscription is received.
Restrictions on further issue of capital do not apply to
private companies. The minimum number of directors of a private
company is two only.
8/7/2019 Companyies Act, 1956
9/80
It is not necessary for the directors to file a writtenconsent to act as directors, to the Registrar
It is not necessary for directors to take upqualification shares.
It is not required to maintain a separate Index ofMembers. Two members present can form a quorum in any
meeting of a private company. The directors are not liable to retirement by rotation. The restrictions regarding remunerations of directors
are not applicable to the private company. Restrictions regarding appointment of Managing
Director for more than five years at a time are notapplicable.
8/7/2019 Companyies Act, 1956
10/80
INCORPORAYION OF A
COMPANYA company is said to have beenincorporated or registered when itgets the certificate of Incorporationfrom the Registrar of Companies.Certain steps have to be taken andnecessary legal formalities completedfor that purpose. The steps and
formalities required for incorporationof company vary according to thetype of the company concerned.
8/7/2019 Companyies Act, 1956
11/80
Steps for the Incorporation of aPublic Company limited by
Shares Application for approval of name
Preparation of Memorandum of Association
Preparations or Article of Association Printing, Signature and Stamping of
Memorandum and Articles
Preparations of other Documents
Filing of Documents for Registration Certificate of Incorporation
8/7/2019 Companyies Act, 1956
12/80
MEMORANDUM OF
ASSOCIATIONThe Memorandum of Association isthe charter of the company, and
provides the foundation on which thestructure of the companys activitiesas well as its relation with the outsideworld.
8/7/2019 Companyies Act, 1956
13/80
CONTENTS OF THE
MEMORANDUM Name clause
Domicile (or) Situation Clause
Objects Clause Liability Clause
Capital Clause
Association Clause
8/7/2019 Companyies Act, 1956
14/80
DOCTRINE OF ULTRA VIRESUltra means beyond and Vires means power. The term ultra vires acompany means that the doing of the act is beyond the legal powerand authority of the company. The doctrine of ultra vires is importantin defining the limits of the power conferred on the company by itsMemorandum of Association. Under this doctrine, a company haspower to engage in only such activity or enter into such transactions.
Which are essential to the attainment of the objects specified in theMemorandum; Which are reasonably and fairly incidental to the main objects ;and Which are permitted by the provision of the Company Act.
The doctrine of ultra vires was first enunciated in the celebrated caseAshbury Railway Carriage and Iorn CO. Ltd., vs Riche. The companywas registered with the following objects.
To make ,and sell, or lend on hire, railway carriages and wagons; To carry on the business of mechanical engineers and general
contractors; To purchase, lease, work and sell mines, mineral, land and building.
8/7/2019 Companyies Act, 1956
15/80
Effects of Ultra Vires
TransactionsIf a company enters into transaction which are ultra vires, it will have
the following effects.
Injunction: Whenever a company goes beyond the scope of the clause,any of its members can get an injunction from the court to restrain the
company from undertaking the ultra vires act. Personal Liability of Directors: If the transaction is ultra vires, for
instance, if the found of the company are misapplied, the directors willbe held personally liable.
Ultra vires Contracts: Contracts entered into by a company, which areultra vires, are void ab initio and unenfcrceable.
Property Acquired Ultra vires: if a company acquires any propertyunder an ultra vires transaction, if has the right to hold the propertyand protect it against damage by other persons.
Ultra Vires Torts: A company is not liable for torts committed by itsagents or employees in the course of ultra vires transaction.
8/7/2019 Companyies Act, 1956
16/80
Alteration of Memorandum Alteration of Name Clause
Alteration of Situation Clause
Alteration of Object Clause Alteration of Liability Clause
Alteration of Capital Clause
8/7/2019 Companyies Act, 1956
17/80
Articles of AssociationThe rules and regulations which are
framed for the internal management
of a company are set out in adocument known as the Articles ofAssociation. The articles are framedto enabled the company to carry out
the aims and objects of the companyset out in the Memorandum ofAssociation.
8/7/2019 Companyies Act, 1956
18/80
Contents of Articles Share capital and its subdivisions into different classes of shares,
rights of share holders and their variation The producer for making allotment, call on shares and transfer,
transmission, forfeiture and surrender of shares, including lien onshares.
Alteration and reduction of capital Borrowing powers
Appointment of Manager, Managing Director, Secretary. Declaration of dividend Procedure for convening, holding and conducting different kinds of
meetings, voting rights and methods Maintenance of books of account and their audit
Share Certificates and Share Warrants, conversion of shares intostock Seal of the company Winding up
8/7/2019 Companyies Act, 1956
19/80
Alteration of ArticlesThe Articles of Association can be altered or
added to by passing a special resolution inthe extra-ordinary general meetingprovided.
The alteration is not to the provision of theact
It is not inconsistent with or beyond theprovisions of the Memorandum and
T does not increase the liability of amember without his written consent bycompelling him to take more shares thanhe had held prior to the alteration
8/7/2019 Companyies Act, 1956
20/80
Doctrine of Constructive NoticeThe Memorandum and Articles, on registration
assume the character of public documents.The office of the Registrar is a public office
and documents registered there are openand accessible to the public at large.Therefore, every outsider dealing with thecompany is deemed to have notice of the
contents of the Memorandum and Articles.This is known as Constructive Notice ofMemorandum and Articles
8/7/2019 Companyies Act, 1956
21/80
Doctrine of Indoor ManagementWhen an outsider enters into a contract with the company,
he is presumed to have knowledge of the provisions ofmemorandum and articles as per the doctrine ofconstructive notice. But he is not required to go beyondthat and to enquire whether the internal proceeding
required by these documents have been regularlyfollowed by the company. They need not enquirewhether the necessary meeting was convened and heldproperly or whether necessary resolution was passedproperly. They are entitled to take it for granted that thecompany had gone through all these proceeding in aregular manner. This is known as the Doctrine of Indoor
Management.The Doctrine of Indoor Management was first propounded byLord Hatherlyin the celebrated case Royal British Bankvs. Turquand
8/7/2019 Companyies Act, 1956
22/80
Exceptions to the Doctrine of
Indoor Management Where the person dealing
with the company hasactual or constructive noticeof any irregularity in theinternal proceedings of thecompany
Where a person did not infact consult theMemorandum and Articlesof the company andconsequently did not act onknowledge of thesedocuments
Where a person dealingwith the company wasnegligent and, had he notbeen negligent, could havediscovered the irregularityby proper enquiries
Where a person dealing
with the company reliesupon a forged document or
8/7/2019 Companyies Act, 1956
23/80
The company itself cannot act in itsown person, for it has no person it
can only act through directors, andthe case is , as regards thosedirectors ,merely the ordinary caserof principal and agent
8/7/2019 Companyies Act, 1956
24/80
Definition[sec.2(13)]`Directorincludes any person occupying the
position of director, by whatever namecalled.
It refers to the nature of the office.
If he performs the functions of adirector he would be termed a directorin the eyes of law.
He is a person having control over thedirection, conduct, management orsuperintendence of affairs of acompany.
Any person in accordance with whose
8/7/2019 Companyies Act, 1956
25/80
Only individuals can becomedirectors.
Companies act does not specify anyqualification.
Share qualification.
Disqualification.
A person of unsound mind.
An undischarged insolvent
A person convicted by any offence.
8/7/2019 Companyies Act, 1956
26/80
It is very difficult to state the legalposition of directors in the company
Directors as agents. Directors as employees.
Directors as officers.
Directors as trustees
8/7/2019 Companyies Act, 1956
27/80
Only individuals can bedirectors(sec.253)
Public company shall have at least 3directors
A paid-up capital of 5crore or moreand one thousand or more small
shareholders.
Shall have at least one directorelected by such small shareholder.
Private company at least 2 directors.
8/7/2019 Companyies Act, 1956
28/80
First directors.
Appointment of directors by the
company. Appointment of directors by
directors.
Appointment of directors by thirdparties.
Appointment by proportionalrepresentation.
Appointment of directors by the
8/7/2019 Companyies Act, 1956
29/80
General powers of the Board.
Powers to be exercised at board
meetings. Powers to be exercised with the
approval of company in generalmeetings.
8/7/2019 Companyies Act, 1956
30/80
Fiduciary duties.
Exercise powers.
Not place in position with conflict. Duties of care, skill and diligence.
Standard of care.
Other duties of directors.
8/7/2019 Companyies Act, 1956
31/80
M
eaning & definition Meaning:Meaning:
The person or representatives elected by theThe person or representatives elected by theshareholders to mange or direct the dayshareholders to mange or direct the day--toto--day affairsday affairsof the company are individually known asof the company are individually known as
DIRECTORSDIRECTORS.. Definition:Definition:
Acc to sec 2(13) of the companies act of 1956 aAcc to sec 2(13) of the companies act of 1956 adirector is director is any person occupying the position ofany person occupying the position ofdirector, by whatever name is called.director, by whatever name is called.
In general he is a person who is responsible forIn general he is a person who is responsible fordirecting ,conducting, & controlling the affairs of thedirecting ,conducting, & controlling the affairs of thecompany.company.
8/7/2019 Companyies Act, 1956
32/80
Number of directors As per sec 252 of the companies act
of 1956, every public company (other
than a private co. which has becomea public co. by virtue of sec 43A ofcomp. act) must have at least 3directors,& private co. (whether it is
an independent private co. which is asubsidiary of a public company) musthave at least 2 directors.
8/7/2019 Companyies Act, 1956
33/80
R
emuneration Part time directors:
1% of net profit with co. having whole timedirector & 3% of net profit without whole
time director.
Whole time directors:
If only one director then 5% & if more thanone 10% of net profit.
Managers:
5% of net profit.
8/7/2019 Companyies Act, 1956
34/80
Contd ..
Total managerial remuneration to alldirectors:
11% of the net profit. Minimum remuneration payable in
case of inadequacy or absence ofprofits:
Rs.50000 (with the previous approvalof central govt.)
8/7/2019 Companyies Act, 1956
35/80
Appointment
Different ways of appointment are
i. By the promoters
ii. By board of directorsiii. By third parties
iv. By proportional representation
v. By central govt.
8/7/2019 Companyies Act, 1956
36/80
Appointment of first directors by
promoters at the time of the formation of
company, the promoters of the o.select & secure the consent of some
prominent persons to act as thedirectors of the co. & also mentiontheir names in articles of association ofco. (section 254 & clause 64 of tableA)
8/7/2019 Companyies Act, 1956
37/80
Appointment by board of directors:
1. Additional directors: they may beappointed by b.o.d under sec 260 ofcompanies act. Considering theseprovisions:
a. The no. of directors + additionaldirector must not exceed the strengthfixed for the board by the articles.
b. He will hold office only up to the dateof the next annual general meeting ofthe company.
8/7/2019 Companyies Act, 1956
38/80
Contd
1. Directors in casual vacancy
a. Under sec262 in case of public or pvt co.which is a subsidiary of a public co. ,if the
office of any director appointed by themembers in an due to the death ,resignation ,or failure of an electeddirector to accept the office or due to any
other reason.b. He will hold office only up to the date upto
which the previous director would haveheld office.
8/7/2019 Companyies Act, 1956
39/80
Contd
3. Alternate director:
a. Under sec 313 if authorized by A/A
b.o.d of comp. through a resolutionpassed at board meeting mayappoint an alternate director to actfor the original director during his
absence for period of more than 3months from the state in which themeetings of the board are ordinarilyheld.
8/7/2019 Companyies Act, 1956
40/80
Appointment by third parties:
The article of association of companyauthorize the debenture holders orother creditors like banks or otherfinancial corporations , which have
advanced loans to the company toappoint their nominees to the board ofdirectors.
Provisions to note under this are: No. of directors should not exceed
1/3rd of total strength of board.
Such directors are not to retire by
8/7/2019 Companyies Act, 1956
41/80
Appointment by principle of
proportional representation: acc to sec 265 allows a public company
or pvt comp. which is a subsidiary ofpublic comp. to provide in its A/A for
the appointment of not less than 2/3rdof the total number of directors.
This will help minority shareholders to
have some of their nominees on theboard of directors.
8/7/2019 Companyies Act, 1956
42/80
Appointment by the centralgovernment:
central government may appoint thedirectors of the company where thecompany law board decides that itsnecessary to safeguard the interests ofthe company or shareholders or thepublic.
Provision to be noted
Directors appointed may or may not beshareholders of company
They can hold office for max 3yrs atany one time & can be removed any
time & some other person may be
8/7/2019 Companyies Act, 1956
43/80
Position of directorsPosition of directors Directors as agents:
A company as an artificial person acts
through directors who are the electedrepresentatives of shareholders. Theyare in the eyes of law the agents ofthe company for which they act & the
relationship betn director n companyis like principal & agent in generallaw.
8/7/2019 Companyies Act, 1956
44/80
Directors as employees:
Although the directors of company are itsagents they are not its employees forbeing entitled to benefits which aregranted under the companies act.
But there is nothing to prevent themfrom being a employee of the companybecause the company at itself indicatesmany situations where a director may
be in employment of company.
8/7/2019 Companyies Act, 1956
45/80
Directors as officers:
For certain under companies act thedirector is treated as officers of thecompany under sec 2(30). They are
also liable to penalties if the provisionsof the company are not complied with.
8/7/2019 Companyies Act, 1956
46/80
Directors as trustees:
Of companys money & property:
It means that they must account for allthe companys money & property overwhich they exercise control. they have
also to refund money/property ifimproperly transferred
Of powers entrusted to them;
Means they exercise their powers
honestly & in the interest of thecompany & the shareholders.
Case: (Alexander Vs. automatictelephone co)
8/7/2019 Companyies Act, 1956
47/80
Duties of directors
The statutory duties of directors are: Fiduciary duties
Exercise their powers with honesty & for thebenefit of the company as a whole.
Not to place themselves in a positions wherethere is conflict betn their duties to thecompany & personal interest.
Fiduciary duties are owed to company & notto individual shareholders. Leading case (Percival Vs Wright)
8/7/2019 Companyies Act, 1956
48/80
Duties of care , skill ,& diligence:
Standard of care skill & diligence dependsupon the nature of companys business& circumstances of case.
Type & nature of work.
Division of power between director &other officer.
General usage & custom in that type ofbusiness.
Whether directors work graciously orremuneratively.
8/7/2019 Companyies Act, 1956
49/80
General duties
They must manage the affairs of thecompany efficiently.
They must act in good faith & in theinterest of company.
To attend all board meetings unlessphysically impossible.
They must not be negligent in the
discharge of their duties.
8/7/2019 Companyies Act, 1956
50/80
Liabilities of directors
1. Liability to third parties: this mayarise
Under the act:
Independently of the act:
Directors as agents are not personallyliable on contracts entered into asagents on behalf of com. exception to
this rule if a director fails to excludepersonal liability. Eg: signing ofnegotiable instrument without comp.name &on behalf of comp.
8/7/2019 Companyies Act, 1956
51/80
2.Liabilities to the company
Ultra vires act:
Negligence
Breach of trust misfeasance
8/7/2019 Companyies Act, 1956
52/80
3. Liability for breach of statutoryduties
There are numerous statutory dutiesof directors.
Most of these relate to maintenanceof proper accounts, filing of returnsetc.
If fails to perform these duties then
he is liable for penalties.
8/7/2019 Companyies Act, 1956
53/80
4.Liability for acts of co-directors
A director is not liable for the act ofhis co directors provided he has noknowledge.
His co directors are not his agentswho can by their acts impose liabilityon him.
8/7/2019 Companyies Act, 1956
54/80
Validity of directors
Acts done by person shall be valid,notwithstanding that it mayafterwards be discovered that his
appointment was invalid by reason ofdefect or terminated by virtue of ayprovision contained in articles.
A director who is not duly appointed
but acts as director is known as DEFACTO .
A properly appointed director is calledDE JURE.
8/7/2019 Companyies Act, 1956
55/80
Qualifications
The nominal or face value of thequalification share of a director fixedby articles must not exceed rs.5000
It must acquired by a person electedas directors within two months of hisappointment
The qualification shares of director
must be disclosed in the prospectus.
8/7/2019 Companyies Act, 1956
56/80
contd
For the purpose of calculation ofqualification shares only the sharesincluded in the share certificate in thename of a director are taken intoaccount & not from share warrant.
Every director must within 2 months
after appointment file with theregistrar a declaration in writingspecifying therein the qualificationshares held by him.
8/7/2019 Companyies Act, 1956
57/80
Disqualifications
A person of unsound mind
An undischarged insolvent
A person who has to be adjudicatedas an insolvent & his application ispending.
A person who is disqualified forappointment as director by antribunal under sec203 on the groundof fraud in relation to company.
8/7/2019 Companyies Act, 1956
58/80
Vacation of office by director
Under sec 283 office of director shallbecome vacant if:
He fails to qualification share within 2
months of his appointment as director. When he found to be of unsound mindby court
When he fails to disclose the nature of
his interest in any contract with thecomp. before the board.
8/7/2019 Companyies Act, 1956
59/80
contd
When he is removed from office forpreventio n of mismanagement by thecourt.
When he is removed from office forfraud breach of trust etc by centralgovernment
When he fails to pay the calls on his
shares within 6 months from datewhen it fell due.
When the period for which he isappointed is expired.
8/7/2019 Companyies Act, 1956
60/80
Powers of directors
General powers to board undersec(291)
Powers to be exercised by boardmeetings under sec(292)
Powers to be exercised with theapproval of company in general
meeting under sec(293) Political contributions sec(293-A)
8/7/2019 Companyies Act, 1956
61/80
2nd Type of voluntary winding upieCreditor's voluntary winding up .
A voluntary winding up of a company inwhich a declaration of its solvency is notmade is referred to as a creditor's voluntarywinding up
8/7/2019 Companyies Act, 1956
62/80
Provisions applicable to creditorsvoluntary winding up
Secs.500 to 509 shall apply in relation tocreditors voluntary winding up(sec 499).the
provisions of these sections are asfollows:
8/7/2019 Companyies Act, 1956
63/80
1]. Meetings of creditors (sec500):
The company shall call a meeting ofthe creditors of the company on the day onwhich there is to be held the generalmeeting of the company at which theresolution for voluntary winding up is to beproposed, or on the next day. It shall sendnotices of the meeting to the creditors bypost simultaneously with the sending of the
notices of meeting of the company.
8/7/2019 Companyies Act, 1956
64/80
2].Notice of resolution to be given to
Register(sec501).
Notice of any resolutionpassed as a creditors meeting shall begiven by the company to the Registerwithin 10 days of the passing thereof
8/7/2019 Companyies Act, 1956
65/80
3].Appointment of liquidator (sec502).
The creditors & the members at
their respective meetings may nominatethe liquidator.
If they nominate different persons, the
creditors nominee shall be the liquidator.The application shall be made to theTribunal within 7 days after the date onwhich the nomination was made by the
creditors .If no person is nominated bythe creditors the person nominated bythe members shall be the liquidator.
4]Appointment of committee of
8/7/2019 Companyies Act, 1956
66/80
4]Appointment of committee ofinspection (sec503).
The creditors at their meetingmay, if they think fit, appoint acommittee of inspection consisting of
not more than 5 persons .
5].Liquidators remuneration (sec504).5].Liquidators remuneration (sec504).
The committee of inspection,The committee of inspection, oror if there is no suchif there is no suchcommittee, the creditors, may fix the remuneration ofcommittee, the creditors, may fix the remuneration of
the liquidator. The remuneration shall not bethe liquidator. The remuneration shall not be
increased in any circumstances.increased in any circumstances.
8/7/2019 Companyies Act, 1956
67/80
6].Power to fill vacancy in office ofliquidator(sec506)
If a vacancy occurs by death,resignation or otherwise, in the office ofa liquidator, the creditors in general
meeting may fill the vacancy.
7].Power of liquidator to acceptshares etc , as consideration forsale of property (sec507).
The provisions of sec494 shall apply in thecase of a creditors voluntary wounding
up.
8/7/2019 Companyies Act, 1956
68/80
8].Duty of liquidator to call meeting atthe end of each year( sec508).
The liquidator shall call a general meetingof the company & a meeting of thecreditors every year, within 3 monthsfrom the close of every year. This willbe so if the winding up continues formore than 1 year.
8/7/2019 Companyies Act, 1956
69/80
Consequences of winding up
Consequences as toshareholders/members.Consequences as to servants & officers.Consequences as to servants & officers.
Consequences as to proceedings againstConsequences as to proceedings against
the company.the company.Consequence as to cost.Consequence as to cost.
Consequences as to creditors.Consequences as to creditors.
8/7/2019 Companyies Act, 1956
70/80
Voluntary Winding Up
(Secs. 484 to 520)
Voluntary winding up means windingup by the members or creditors of acompany without interference by the
Tribunal.
8/7/2019 Companyies Act, 1956
71/80
Types ofVoluntary Winding Up
1. Members voluntary windingup.
2. Creditors voluntary windingup.
8/7/2019 Companyies Act, 1956
72/80
Provisions applicable to a membersvoluntary winding up:
1.1. Appointment and remuneration ofAppointment and remuneration ofliquidators (sec. 490):liquidators (sec. 490):
The company in generalThe company in generalmeeting shall appoint one or moremeeting shall appoint one or moreliquidators for the purpose of windingliquidators for the purpose of windingup its affairs and distributing itsup its affairs and distributing its
assets.assets.
8/7/2019 Companyies Act, 1956
73/80
2.2.Boards powers to cease onBoards powers to cease onappointment of a liquidator (sec.appointment of a liquidator (sec.491):491):
On the appointment of aOn the appointment of aliquidator, all the powers of the Boardliquidator, all the powers of the Boardof directors, the managing or wholeof directors, the managing or whole--
time directors, and manager, shalltime directors, and manager, shallcease except when the company incease except when the company ingeneral meeting or the liquidatorgeneral meeting or the liquidatormay sanction them to continue.may sanction them to continue.
8/7/2019 Companyies Act, 1956
74/80
3.3.Power to fill vacancy in office ofPower to fill vacancy in office ofliquidator (sec. 492):liquidator (sec. 492):
If a vacancy occurs by death,If a vacancy occurs by death,resignation or otherwise in the officeresignation or otherwise in the officeof any liquidator appointed by theof any liquidator appointed by thecompany in general meeting may fillcompany in general meeting may fill
the vacancy.the vacancy.
8/7/2019 Companyies Act, 1956
75/80
4.4.Notice of appointment of liquidator toNotice of appointment of liquidator tobe given to Registrar (sec. 493):be given to Registrar (sec. 493):
The company shall give notice toThe company shall give notice tothe Registrar of the appointment of athe Registrar of the appointment of aliquidator or liquidators.liquidator or liquidators.
8/7/2019 Companyies Act, 1956
76/80
5.5. Power of liquidator to acceptPower of liquidator to acceptshares, etc. as the considerationshares, etc. as the considerationfor sale of property (sec.494):for sale of property (sec.494):
8/7/2019 Companyies Act, 1956
77/80
6.6. Duty of liquidator to callDuty of liquidator to callcreditors meeting in case ofcreditors meeting in case ofinsolvency (sec.495):insolvency (sec.495):
If the liquidator is at anyIf the liquidator is at anytime of opinion that the companytime of opinion that the companywill not be able to pay its debts inwill not be able to pay its debts in
full within the period stated infull within the period stated inthe declaration, he shallthe declaration, he shallforthwith summon a meeting offorthwith summon a meeting ofthe creditors.the creditors.
8/7/2019 Companyies Act, 1956
78/80
7.7.Duty to call general meeting atDuty to call general meeting atthe end of each year (sec.496):the end of each year (sec.496):
In the event of the windingIn the event of the windingup continuing for more then 1up continuing for more then 1year, the liquidator shall call ayear, the liquidator shall call ageneral meeting of the companygeneral meeting of the company
at the end of the 1 year from theat the end of the 1 year from thecommencement of the windingcommencement of the windingup.up.
8/7/2019 Companyies Act, 1956
79/80
8.8. Final meeting and dissolutionFinal meeting and dissolution(sec.497):(sec.497):
As soon as the affairs of theAs soon as the affairs of thecompany are fully wound up, thecompany are fully wound up, theliquidator shall make up an accountliquidator shall make up an accountof the winding up.of the winding up.
8/7/2019 Companyies Act, 1956
80/80
9.9. Provisions as to annual and finalProvisions as to annual and finalmeeting in case of insolvencymeeting in case of insolvency(sec.498):(sec.498):
If in the case of aIf in the case of amembers voluntary winding up, themembers voluntary winding up, theliquidator finds that the company isliquidator finds that the company is
insolvent.insolvent.