1. winding up of the company under the new law
DESCRIPTION
A company is a juristic person that comes into existence by way of incorporation and can be dissolved by undertaking winding-up process as per the provisions of the Companies Act, 2013 (“New Act”). The winding up process is the last stage in the life of a company, wherein its existence is dissolved and all its assets are used to satisfy the creditors and shareholders. The present article intends to give a brief overview of the process of winding up under the New Act for our readers.TRANSCRIPT
WINDING UP OF A COMPANY UNDER THE NEW ACT
Jyoti SrivastavaPartner, Legal Imperials
[Head Litigation, Arbitration, Corporate Advisory]
LL.B, IPR (Cert.), PGDADR, Mediator (ICADR); Legal Aid Counsel, Delhi District Court
DEFINITION OF A COMPANY
LIFE CYCLE OF A COMPANY
MODES OF WINDING UP
WINDING UP: MEANING
RELEVANT SECTIONS FOR WINDING UP UNDER THE OLD COMPANIES ACT
CRITERIA FOR WINDING UP
CRITERIA FOR WINDING UP UNDER THE OLD ACT
NEW ACT ON
1. The company is unable to pay its debts which is a situation when:
• The company on the demand of the creditor a sum within 21 days of receipt of the demand notice is unable to provide adequate security or is unable to restructure the debt or compound the debt to the reasonable satisfaction of the creditor.
• If the execution decree in favour of creditor is returned unsatisfied,
• If it is proved to the satisfaction of the Tribunal that the company is unable to pay its debts.
REASONS FOR WINDING UP
OTHER REASONS FOR WINDING UP
WINDING UP PROCESS BY TRIBUNAL
Winding up takes management out of the hands of the BOD
Thank You
_______________Legal
Imperials