FINAL MEETING AND DISSOLUTION OF COMPANY (SECTION 318):
As soon as the affairs of a company are fully wound up, the Company Liquidator shall prepare a report of the winding up showing that the property and assets of the company have been disposed of and its debt fully discharged or discharged to the satisfaction of the creditors and thereafter call a general meeting of the company for the purpose of laying the final winding up accounts before it and giving any explanation.
The meeting shall be called by the Company Liquidator.
If the majority of the members of the company after considering the report of the Company Liquidator are satisfied that the company shall be wound up, they may pass a resolution for its dissolution.
Within two weeks after the meeting, the Company Liquidator shall—
(a) send to the Registrar—
(i) a copy of the final winding up accounts of the company and shall make a return in respect of each meeting and of the date thereof; and
(ii) copies of the resolutions passed in the meetings; and
(b) file an application along with his report along with the books and papers of the company relating to the winding up, before the Tribunal for passing an order of dissolution of the company.
If the Tribunal is satisfied, after considering the report of the Company Liquidator that the process of winding up has been just and fair, the Tribunal shall pass an order dissolving the company within sixty days of the receipt of the application.
The Company Liquidator shall file a copy of the order with the Registrar within thirty days.
The Registrar, on receiving the copy of the order passed by the Tribunal shall forthwith publish a notice in the Official Gazette that the company is dissolved.
If the Company Liquidator fails to comply with the provisions of this section, he shall be punishable with fine which may extend to one lakh rupees.
POWER OF COMPANY LIQUIDATOR TO ACCEPT SHARES ETC AS CONSIDERATION (SECTION 319):
Where a company (the transferor company) is proposed to be, or is in the course of being, wound up voluntarily and the whole or any part of its business or property is proposed to be transferred or sold to another company (the transferee company), the Company Liquidator of the transferor company may, with the sanction of a special resolution of the company conferring on him either a general authority or an authority in respect of any particular arrangement,—
(a) receive, by way of compensation wholly or in part for the transfer or sale of shares, policies, or other like interest in the transferee company, for distribution among the members of the transferor company; or
(b) enter into any other arrangement whereby the members of the transferor company may, in lieu of receiving cash, shares, policies or other like interest or in addition thereto, participate in the profits of, or receive any other benefit from, the transferee company.
No such arrangement shall be entered into without the consent of the secured creditors.
Any transfer, sale or other arrangement shall be binding on the members of the transferor company.
Any member of the transferor company who did not vote in favour of the special resolution and expresses his dissent therefrom in writing addressed to the Company Liquidator, and left at the registered office of the company within seven days after the passing of the resolution, may require the liquidator either—
(a) to abstain from carrying the resolution into effect; or
(b) to purchase his interest at a price to be determined by agreement or the registered valuer.
If the Company Liquidator elects to purchase the member’s interest, the purchase money shall be paid before the company is dissolved.
DISTRIBUTION OF PROPERTY OF COMPANY (SECTION 320):
The assets of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application, shall, unless the articles otherwise provide, be distributed among the members according to their rights and interests in the company.
ARRANGEMENT WHEN BINDING ON COMPANY AND CREDITORS (SECTION 321):
Any arrangement other than the arrangement referred to in section 319 entered into between the company which is about to be, or is in the course of being wound up and its creditors shall be binding on the company and on the creditors if it is sanctioned by a special resolution of the company and acceded to by the creditors who hold three-fourths in value of the total amount due to all the creditors of the company.
Any creditor or contributory may, within three weeks from the completion of the arrangement, apply to the Tribunal and the Tribunal may thereupon amend, vary, confirm or set aside the arrangement.
POWER TO APPLY TO TRIBUNAL TO HAVE QUESTIONS DETERMINED (SECTION 322):
The Company Liquidator or any contributory or creditor may apply to the Tribunal—
(a) to determine any question arising in the course of the winding up of a company; or
(b) to exercise as respects the enforcing of calls, the staying of proceedings or any other matter, all or any of the powers which the Tribunal might exercise if the company were being wound up by the Tribunal.
The Company Liquidator or any creditor or contributory may apply to the Tribunal for an order setting aside any attachment, distress or execution put into force against the estate or effects of the company after the commencement of the winding up.
The Tribunal, if satisfied on an application that the determination of the question or the required exercise of power or the order applied for will be just and fair, may allow the application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks fit.
A copy of an order staying the proceedings in the winding up, made under this section, shall forthwith be forwarded by the company, or otherwise as may be prescribed, to the Registrar, who shall make a minute of the order in his books relating to the company.
COSTS OF VOLUNTARY WINDING UP (SECTION 323):
All costs, charges and expenses properly incurred in the winding up, including the fee of the Company Liquidator, shall, subject to the rights of secured creditors, if any, be payable out of the assets of the company in priority to all other claims.
Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.