Winding up and dissolution of a company.

Winding Up and Dissolution - Summary:

1. Distinction Between Winding Up and Dissolution:

Winding Up (s. 267): Process of realizing a company's assets to pay off liabilities and distribute among members.

Dissolution: Occurs after the winding-up process, putting an end to the company's existence.

Bankruptcy: Applies to individuals or partnerships; companies cannot go bankrupt.

2. Modes of Winding Up:

Compulsory Winding Up (By Court - s. 272):

Situations: Special resolution, non-commencement of business, insufficient members, inability to pay debts, just and equitable winding up.

Persons Entitled to Petition: The company, creditors, contributories.

Powers of the Court (s. 282):

Dismiss or adjourn petition.

Make interim orders.

Make orders for winding up with or without costs.

3. Commencement of Winding Up (s. 286):

Winding up deemed to commence when a resolution for voluntary winding up is passed.

4. Consequences of Winding Up Order (s. 287-289):

Notice of discharge for officers and employees.

Legal proceedings against the company cannot be initiated without court leave.

Order operates for the benefit of all creditors and contributories.

5. Liquidator (s. 294):

Appointed by the court for conducting proceedings in winding up.

Can be appointed provisionally before the winding-up order.

Powers of Liquidators (s. 301): With the court's sanction, to bring legal proceedings, carry on the business, appoint advocates, make compromises, and more.

6. Member’s Voluntary Winding Up (s. 348):

Applicable to solvent companies.

Directors make a declaration of solvency (s. 348).

Liquidators appointed, and assets used to pay off liabilities.

Annual general meetings held if the winding-up continues for more than one year.

7. Creditor’s Voluntary Winding Up (s. 348):

Applicable to insolvent companies or when a solvency declaration is not made.

Creditors' meeting held along with a general meeting.

Directors present a statement of the company's position and creditors' list.

8. Powers of the Court in Voluntary Winding Up (s. 303):

Appoint a liquidator if the appointed one is not acting.

Remove and appoint a new liquidator for justifiable cause.

Determine questions arising in the winding-up process.

Understanding these procedures is crucial for both the company and its stakeholders during the complex process of winding up and dissolution.