corporate law unit ix

7/28/2019 Corporate Law Unit Ix

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Module IX

Company Meetings & CompanySecretary

Course Leader:

Dr. K. Srinivasan

Department of Management Studies

Christ University, Bangalore.


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Winding Up

Winding Up of a company is the process whereby itslife is ended and its property administered for the

benefit of its creditors and members.

An administrator, called liquidator, is appointed andhe takes control of the company, collects its assets,

pays its debts and finally distributes any surplus amongthe members in accordance with their rights

Professor. Gower


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Modes of Winding Up

Winding up by the Court (Compulsory Winding Up)

Voluntary Winding Up

a) Members Voluntary Winding Up

b) Creditors Voluntary Winding Up

Winding Up subject to the supervision of the Court.


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Winding Up by the Court

Special Resolution of the CompanyDefault in holding statutory meeting Failure to commence businessReduction in Membership

Inability to pay its debtsDemand for payment neglectedDecreed debt unsatisfiedCommercial Insolvency

Just and EquitableSubstratum of the Company is goneMajority of the shareholders using the powers unfairly

Deadlock in the management to achieve the objectives


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Petition for Winding UpBy the CompanyBy the Creditors

Debentures HoldersCentral or state Government whom any tax charge is due.Person who has monetary claim against the company

By any Contributory or ContributorsMembership is reduced below the statutory minimumOriginal Allottee of shares

Held the company shares for at least 6 months during the 18months immediately before the commencement of winding up.Shares have transferred through the death of a former holder.

By the Registrar

By any person authorized by the Central Government


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Content of the Petition

Name of the Company with the date of itsIncorporation

Address of the Registered Office

Amount of PaidUp CapitalStatement of facts to justify a winding Up order.

Request to the Court to issue an order of winding

upStatement in the form of an affidavit that the factsstated in the petition are correct and true.


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Commencement of Winding Up

Advertisement of Petition

Power of Court to stay or restrain proceedings againstcompany

Intimation to Liquidator or Registrar

Copy of Winding up order to be filled with the

Registrar

Procedures for Winding Up


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Consequences of Winding Up

Order for winding up deemed to be notice of discharge

Suits Stayed

Powers of the Court

Effect of Winding Up

Official Liquidator to be liquidator


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Liquidator

Liquidator is a person who helps the court to completethe liquidation proceedings. An official liquidator may

be appointed from a panel of professional firms of

CA, Advocates, Company Secretaries etc., which theCentral Government shall constitute for the court; or

may be a body corporate consisting of such

professionals as may be approved by the centralgovernment from time to time; or may be a wholetime or part time officer appointed by the central

government.


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Duties of Liquidator

Proceedings in Winding UpReport

Custody of Companys Property

Control of PowersMeetings of Creditors and Contributors

Directions from the Court

Proper BooksAudit of Accounts

Appointment of Committee of Inspection

Pending Liquidation


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Powers of OfficialLiquidator

1. To defend any suit, civil or criminal proceedings in the nameand on behalf of the company.

2. To carry on the business of the company so far as may benecessary for the beneficial winding up of the company.

3. To sell movable or immovable property of the company wholly or in parcels either privately or through public action.

4. To raise money on the security of the assets of the company.5. To do all things as may be necessary for the winding up of

the affairs of the company and distributing its assets.


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Execute all deeds, Receipts and other documents in thename and on behalf of the company under companys seal.

Prove, rank and claim the insolvency of a contributory.

Draw, accept, make and endorse any bill of exchange orpromissory note in the name and on behalf of the company.

Appoint an agent to do any business which the liquidator is

unable to do himself, etc. Appoint Security guards, Valuer, CA etc.

Publish an advertisement inviting bids for sale of the assetsof the company etc.

Other Powers.


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General Powers of the Court

Stay of Winding Up of the CompanySettlement of list of contributories

Delivery of Property

Summoning of Persons suspected of having propertyof the company

Exclusion of Creditors

Order as to Costs

Arrest of Absconding Contributory

Meetings of Creditors or contributories


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Voluntarily Winding Up

Voluntarily winding up means winding up by themembers or creditors of a company without interferencesby the Court.

The main objectives of this winding up is to settle theiraffairs without going to the Court of Law.

The company may wound up voluntarily on two ways;By Passing an Ordinary Resolution

By Passing an Special Resolution


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Provisions Applicable forMVWU

Appointment of LiquidatorsBoards powers to cease on appointment of a liquidator

Powers to fill vacancy in office of liquidator

Notice of appointment of liquidator to be given to RegistrarPower of Liquidator to accept shares etc.

Duty of liquidator to call creditors meeting in case of

insolvencyDuty to call General Meeting at the end of the year

Final Meeting and DissolutionPenalty Rs. 1,000Provisions as to Annual & Final Meeting in case of Insolvency.


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Duties of Secretary inMVWU

Arrange the Board Meeting, within 5 weeks immediatelypreceding the date of passing the resolution for MVWU.Arranging & Preparing P&L Account, B/S & Audited Reportand ending with the latest practicable date before the date ofdeclarationPrepare declaration of Solvency, get it verified by affidavitbefore the Magistrate & file with the Registrar with all reports.

Prepare & Issue of notice of the meeting to members & tocheck special resolution passed, appointment & remunerationfixed in the meeting.Check the Official Gazette and newspapers within 14 days

after passing resolution


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Continued..

Notice of appointment of liquidator is filed withregistrar with 10 days of passing resolution.

Check the special resolution for winding up is filed with

the Registrar within 30 days of the meeting.Check every invoice, order and business letter issued bythe company during the period contains a statement thatcompany is being wound up

Check all the Books, Documents, Movables &Immovable properties of the company are delivered tothe liquidator, for public examination and give evidence

as required.


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Creditors Voluntarily WindingUp (CVWU)

Meeting of Creditors2 NewspapersResolution Notice given to Registrar10 Days & Rs. 500Appointment of Liquidator

Committee Appointment InspectionNot more than 5 PersonsLiquidator RemunerationBoards Powers to cease an appointment of LiquidatorPowers to fill vacancy in office of liquidatorDuty of Liquidator to call meeting of company & Creditors atthe end of each yearFinal Meeting & Dissolution


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WU- Subject to Supervisionof Court

WU of a company subject to the supervision of the courtpresupposes a voluntary winding up of the Company

At any time after a company passed a winding up, the

Court may make an order that voluntary winding up shallcontinue, but subject to the supervision of the Court.

The court may give such liberty to creditors, contributors

or others to apply to as it thinks.Petition for the continuance of a voluntary winding upsubject to the supervision of the Court is deemed to be a

petition for winding up by the Court.


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Consequences of WindingUp

Consequence as to shareholders

Consequence as to Creditors

Consequence as to Servants & Officers

Consequence as to Proceedings against the Company

Consequence as to Costs


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