WINDING UP OF COMPANY UNDER COMPANIES ACT 2013.

 BY SUSHMA GOWDA

INTRODUCTION

A company may be wound up in any one of the following three ways, namely

1) By the tribunal (Compulsory winding up)

2) By passing of an appropriate resolution for voluntary winding up at general meeting of members (Voluntary winding up)

Winding – Up:

Compulsory Winding Up under Section 271 of the companies Act, 2013 Voluntary Winding Up under Section 304 of the companies act 2013.

COMPLUSORY WINDING UP BY THE TRIBUNAL (SECTION 271) OF THE COMPANIES ACT, 2013.

Winding by the tribunal, also called compulsory winding up, may be ordered in cases mentioned in Section 271.

Circumstances under which the company may be wound up by tribunal are as follows:

1. a) If the company is unable to pay its debts;
2. b) If the company has, by special resolution, resolved that the company be wound up by the Tribunal;
3. c) If the Company has acted against the interests of Sovereignty and integrity of India, the security of the state, the friendly relations with foreign states, Public order, decency or morality.
4. d) if the Tribunal has ordered the winding up of the company under Chapter XIX;
5. e) If on an application made by the register or any other person authorized by the Central Government, The tribunal is of the opinion that the affairs of the company have been conducted in a fraudulent and unlawful purpose or the persons concerned in the formation or management of its affairs have been guilty of fraud, Misfeasance or misconduct in connection therewith and that it is proper that the company be wound up;
6. f) If the Tribunal is of opinion that it is just and equitable that the company should be wound up.

VOLUNTARY WINDING UP:

Meaning and manner of voluntary Winding up

Winding up by the members or creditors without any intervention of the Tribunal is called “ Voluntary Winding up”. In voluntary winding up, the company and its creditors are left free settle their affairs without going to the tribunal, although they may apply to the Tribunal for directions or orders, if and when necessary.

A company as per Section 304 may be wound up voluntarily:

1) If the company in general meeting Passes a resolution for voluntary winding up;

1. a) Where the period fixed by the articles for the duration of the company has expired; or
2. b) the event has occurred on which under the articles the company is to be dissolved.

2) If the company resolves by special resolution that it shall be wound up voluntarily.

1. a) When a company has passed a resolution for voluntary winding up, it must, within 14 days of the passing of the resolution, give notice of the resolution by advertising in official gazette and also in some newspapers circulating in the district where the registered office or the principal office of the company is situated.
2. b) In case of default, the company and every office of the company who is in default shall be punishable with fine which may extend to rupees five thousand for every day during which the default continues Section 307.