Type of winding up of company
What Are The Different Types Of Winding Up A Company? What Are The Circumstances Under Which Winding Up Becomes Compulsory?
Creditors' voluntary wind up is one of the company's winding up types.
A wind up in the case of which a declaration of solvency has not been made and delivered to the registrar is called as "creditors' voluntary winding up".
Statutory declaration as to the solvency:-
In case of creditors' voluntary winding up of the company, it is not binding to make a statutory declaration regarding the solvency of the company.
Special resolution:-
The company has to call a general meeting of the shareholders and pass a special resolution for the winding up of the company, by advertising it in the local newspaper.
Creditors meeting:-
A meeting of the creditors of the company has to be called on the same day or on the following day the resolution for the winding up is proposed.
A statement of company's affairs:-
On the meeting of the creditors presided over by one of the director, a full statement of the company's affairs together with a list of creditors of the company is to be placed.
Appointment of liquidator
The creditors and shareholders in their respective meetings will nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company.
Appointment of committee of inspection:-
The creditors and the shareholders in their respective meetings can appoint a committee of inspection of not more than five persons in each case.
A wind up in the case of which a declaration of solvency has not been made and delivered to the registrar is called as "creditors' voluntary winding up".
Statutory declaration as to the solvency:-
In case of creditors' voluntary winding up of the company, it is not binding to make a statutory declaration regarding the solvency of the company.
Special resolution:-
The company has to call a general meeting of the shareholders and pass a special resolution for the winding up of the company, by advertising it in the local newspaper.
Creditors meeting:-
A meeting of the creditors of the company has to be called on the same day or on the following day the resolution for the winding up is proposed.
A statement of company's affairs:-
On the meeting of the creditors presided over by one of the director, a full statement of the company's affairs together with a list of creditors of the company is to be placed.
Appointment of liquidator
The creditors and shareholders in their respective meetings will nominate a person to be liquidator for the purpose of winding up the affairs and distributing the assets of the company.
Appointment of committee of inspection:-
The creditors and the shareholders in their respective meetings can appoint a committee of inspection of not more than five persons in each case.
As far as winding up a company goes, it comprises of three kinds. The first kind involves the court that is responsible for winding up the court – this is called compulsory winding up. In the second type of winding up, the court is only supervising the entire process instead of directly getting involved in it. The third type is voluntary winding up on behalf of the company. This type has two sub-categories, the first one involving the winding up on the behalf of members of the company while the second type involves the winding up by creditors on a voluntary basis.
Regarding the circumstances necessary for a company to be winding up, they include the following:
A company has resolved by special resolution to be wound up by the court.
In case of a public company, if a default is paid in delivering the statutory report to the registrar or if the default is made in the holding of any two consecutive Annual General Meetings.
In case of a private company, if default is made in holding the statutory meeting. Also if a company does not commence within a year after its incorporation, winding up becomes compulsory.
Regarding the circumstances necessary for a company to be winding up, they include the following:
A company has resolved by special resolution to be wound up by the court.
In case of a public company, if a default is paid in delivering the statutory report to the registrar or if the default is made in the holding of any two consecutive Annual General Meetings.
In case of a private company, if default is made in holding the statutory meeting. Also if a company does not commence within a year after its incorporation, winding up becomes compulsory.
