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7/28/2019 Corporate Law Unit Ix
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Module IX
Company Meetings & CompanySecretary
Course Leader:
Dr. K. Srinivasan
Department of Management Studies
Christ University, Bangalore.
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Winding Up
Winding Up of a company is the process whereby itslife is ended and its property administered for the
benefit of its creditors and members.
An administrator, called liquidator, is appointed andhe takes control of the company, collects its assets,
pays its debts and finally distributes any surplus amongthe members in accordance with their rights
Professor. Gower
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Modes of Winding Up
Winding up by the Court (Compulsory Winding Up)
Voluntary Winding Up
a) Members Voluntary Winding Up
b) Creditors Voluntary Winding Up
Winding Up subject to the supervision of the Court.
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Winding Up by the Court
Special Resolution of the CompanyDefault in holding statutory meeting Failure to commence businessReduction in Membership
Inability to pay its debtsDemand for payment neglectedDecreed debt unsatisfiedCommercial Insolvency
Just and EquitableSubstratum of the Company is goneMajority of the shareholders using the powers unfairly
Deadlock in the management to achieve the objectives
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Petition for Winding UpBy the CompanyBy the Creditors
Debentures HoldersCentral or state Government whom any tax charge is due.Person who has monetary claim against the company
By any Contributory or ContributorsMembership is reduced below the statutory minimumOriginal Allottee of shares
Held the company shares for at least 6 months during the 18months immediately before the commencement of winding up.Shares have transferred through the death of a former holder.
By the Registrar
By any person authorized by the Central Government
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Content of the Petition
Name of the Company with the date of itsIncorporation
Address of the Registered Office
Amount of PaidUp CapitalStatement of facts to justify a winding Up order.
Request to the Court to issue an order of winding
upStatement in the form of an affidavit that the factsstated in the petition are correct and true.
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Commencement of Winding Up
Advertisement of Petition
Power of Court to stay or restrain proceedings againstcompany
Intimation to Liquidator or Registrar
Copy of Winding up order to be filled with the
Registrar
Procedures for Winding Up
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Consequences of Winding Up
Order for winding up deemed to be notice of discharge
Suits Stayed
Powers of the Court
Effect of Winding Up
Official Liquidator to be liquidator
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Liquidator
Liquidator is a person who helps the court to completethe liquidation proceedings. An official liquidator may
be appointed from a panel of professional firms of
CA, Advocates, Company Secretaries etc., which theCentral Government shall constitute for the court; or
may be a body corporate consisting of such
professionals as may be approved by the centralgovernment from time to time; or may be a wholetime or part time officer appointed by the central
government.
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Duties of Liquidator
Proceedings in Winding UpReport
Custody of Companys Property
Control of PowersMeetings of Creditors and Contributors
Directions from the Court
Proper BooksAudit of Accounts
Appointment of Committee of Inspection
Pending Liquidation
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Powers of OfficialLiquidator
1. To defend any suit, civil or criminal proceedings in the nameand on behalf of the company.
2. To carry on the business of the company so far as may benecessary for the beneficial winding up of the company.
3. To sell movable or immovable property of the company wholly or in parcels either privately or through public action.
4. To raise money on the security of the assets of the company.5. To do all things as may be necessary for the winding up of
the affairs of the company and distributing its assets.
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Execute all deeds, Receipts and other documents in thename and on behalf of the company under companys seal.
Prove, rank and claim the insolvency of a contributory.
Draw, accept, make and endorse any bill of exchange orpromissory note in the name and on behalf of the company.
Appoint an agent to do any business which the liquidator is
unable to do himself, etc. Appoint Security guards, Valuer, CA etc.
Publish an advertisement inviting bids for sale of the assetsof the company etc.
Other Powers.
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General Powers of the Court
Stay of Winding Up of the CompanySettlement of list of contributories
Delivery of Property
Summoning of Persons suspected of having propertyof the company
Exclusion of Creditors
Order as to Costs
Arrest of Absconding Contributory
Meetings of Creditors or contributories
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Voluntarily Winding Up
Voluntarily winding up means winding up by themembers or creditors of a company without interferencesby the Court.
The main objectives of this winding up is to settle theiraffairs without going to the Court of Law.
The company may wound up voluntarily on two ways;By Passing an Ordinary Resolution
By Passing an Special Resolution
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Provisions Applicable forMVWU
Appointment of LiquidatorsBoards powers to cease on appointment of a liquidator
Powers to fill vacancy in office of liquidator
Notice of appointment of liquidator to be given to RegistrarPower of Liquidator to accept shares etc.
Duty of liquidator to call creditors meeting in case of
insolvencyDuty to call General Meeting at the end of the year
Final Meeting and DissolutionPenalty Rs. 1,000Provisions as to Annual & Final Meeting in case of Insolvency.
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Duties of Secretary inMVWU
Arrange the Board Meeting, within 5 weeks immediatelypreceding the date of passing the resolution for MVWU.Arranging & Preparing P&L Account, B/S & Audited Reportand ending with the latest practicable date before the date ofdeclarationPrepare declaration of Solvency, get it verified by affidavitbefore the Magistrate & file with the Registrar with all reports.
Prepare & Issue of notice of the meeting to members & tocheck special resolution passed, appointment & remunerationfixed in the meeting.Check the Official Gazette and newspapers within 14 days
after passing resolution
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Continued..
Notice of appointment of liquidator is filed withregistrar with 10 days of passing resolution.
Check the special resolution for winding up is filed with
the Registrar within 30 days of the meeting.Check every invoice, order and business letter issued bythe company during the period contains a statement thatcompany is being wound up
Check all the Books, Documents, Movables &Immovable properties of the company are delivered tothe liquidator, for public examination and give evidence
as required.
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Creditors Voluntarily WindingUp (CVWU)
Meeting of Creditors2 NewspapersResolution Notice given to Registrar10 Days & Rs. 500Appointment of Liquidator
Committee Appointment InspectionNot more than 5 PersonsLiquidator RemunerationBoards Powers to cease an appointment of LiquidatorPowers to fill vacancy in office of liquidatorDuty of Liquidator to call meeting of company & Creditors atthe end of each yearFinal Meeting & Dissolution
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WU- Subject to Supervisionof Court
WU of a company subject to the supervision of the courtpresupposes a voluntary winding up of the Company
At any time after a company passed a winding up, the
Court may make an order that voluntary winding up shallcontinue, but subject to the supervision of the Court.
The court may give such liberty to creditors, contributors
or others to apply to as it thinks.Petition for the continuance of a voluntary winding upsubject to the supervision of the Court is deemed to be a
petition for winding up by the Court.
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Consequences of WindingUp
Consequence as to shareholders
Consequence as to Creditors
Consequence as to Servants & Officers
Consequence as to Proceedings against the Company
Consequence as to Costs
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