Winding Up of a Company

Legal Analysis Winding up of a Company under Companies Act 2013

The Winding-up of a Company under Companies Act 2013 in any of the following ways:

1. By National Company Law Tribunal (Tribunal).
2. By Voluntary Liquidation.

Winding up by Tribunal under Companies Act 2013

Instances wherein the company can be wound up by Tribunal: A company may, on a petition under section 272 of the Companies Act, 2013^[1] be wound up by the Tribunal,-

(a) If the company with the special resolution has resolved that  company to be wound up by Tribunal;

(b) If the company has acted in contrary to the interests of the sovereignty and integrity of India and also the security of the State, also friendly relations with foreign States, public order, decency or morality;

(c) In case of an application made by Registrar or any other person who is authorized by the Central Government by notification made under this Act,

(d) The Tribunal is of opinion that the affairs of company have been carried on in a fraudulent manner or the company was formed for fraudulent and unlawful purpose or persons concerned information or management of the affairs of the company have been guilty of fraud, or misconduct in nexus therewith and that it is proper that the company be wound up;

(e) If a company has made  default in filing with the ROC its financial statements or annual returns for immediately preceding 5 consecutive financial years; or

(e) If the Tribunal is of the opinion such that it is just and equitable that the company should be wound up.

Who may File Petition for the Winding up of a Company under Companies Act 2013?

An application for the Winding up of a Company has to be made by way of petition to the Tribunal by any of the following persons

(a) The company;

(b) Any contributor or contributors;

(c) All or any of the persons specified in clauses (a) and (b);

(d) The Registrar;

(e) Any person authorized by the Central Government in that behalf etc.

Voluntary Liquidations

The provision dealing with voluntary winding up has since been deleted by the Insolvency and Bankruptcy Code, 2016 and a separate provision of section 59 has been made in the Code for dealing with voluntary winding up of corporate persons including companies

And this gave initiation of voluntary liquidation proceedings by the corporate debtor which has not defaulted on any debt due to any person A corporate debtor, being a company may choose to be wound up voluntarily under several circumstances including winding up as a result of expiry of period of operation fixed in its constitutional documents or occurrence of an event provided in its constitutional documents for its dissolution.

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