1) In every winding up, a
is appointed to administer the property of the company.in case the company is insolvent the interest will be payable only up to the company winding up
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India: Winding Up Of Company: A Statutory Glance – Part 1
22 May 2020
by Amir Ali Bavani and Rishika Kumar
Dhir & Dhir Associates
Winding up of the Company is a legal mechanism of permanently shutting down a company. It is a process by which the Company's corporate existence comes to an end post which the Company goes in for dissolution under the surveillance of a Liquidator. The Liquidator monitors and administers the Company's assets during this crucial stage of the Company's lifetime, to make sure the stakeholders' interest is not hampered. Ultimately, dissolution kicks in, wherein the Company is dissolved and the name is struck off by the Registrar of Companies. Hence, the Company's life comes to an end.
Evolution of Winding Up Laws
The provisions of winding up for the first time were introduced into the legal fraternity through the Companies Act, 1956, and later were retained by the Companies Act, 2013. Under the Companies Act, 1956 there were three modes of winding up:
Winding Up by Court or Compulsory Winding Up;
Voluntary Winding Up and
Winding Up subject to the supervision of the Court
But through the Companies (Second Amendment) Act, 2002, the third provision was omitted, and the word 'Court' was substituted by 'Tribunal'.
A circumstance under which a company is unable to pay its debts used to fall under the category of winding up by Court. The Company's inability to pay debts was considered when it failed to pay off debt amounting to more than Rs.500 (Five Hundred Rupees), which was subsequently changed to a sum exceeding Rs.1,00,000 (One Lakh rupees) through the Companies (Second Amendment) Act, 2002.
Under such a situation, the creditors initially used to issue a demand notice, which the Company had to reply within 21 days. Still, if the Company fails and neglects to pay the due amount, the winding-up proceedings would initiate.
Answer:
winding up of a company is defined as a process by which the life of a company is brought to an end and its property administred for the benefit of its members and creditors •••