Winding up of companies under the companies Act, 2013
Winding up of a company is the process of closing or finishing the business activities of the company permanently. The management of its affairs is taken out of the hands of the directors, shareholders, and members. An Administrator called a liquidator is appointed who will be in charge of the company until the company is wound up. He is the one who works out the assets, pays off the loans, and dispenses the surplus which is left over to the members according to their rights. Thus, in the end, the company has no assets or liabilities. Winding up is different from dissolution, if Winding up is the starting point to enter a tunnel the endpoint of this tunnel will be the dissolution. During the process of winding up, the company is still legally recognized, after dissolution the company loses its legal entity and thus, becomes a dead company. This article briefly talks about the meaning and definition of winding up: Gower and Pennington, etc. The article also talks about the difference between winding up and dissolution, the meaning of the term dissolution, and what signifies it. The next part of the article talks about the types and modes of winding up: winding up by the court, what are the circumstances for winding up under section 271 Companies Act, who can file a petition for winding up under section 272 the Companies Act, what are compulsory and voluntary winding up and how they are differentiated, what is voluntary winding up by the creditors and members. The article also discusses steps and procedures for winding up: how a liquidator is appointed, what is his role in winding up and how he conducts meetings and how he distributes the assets of the company among the creditors, how he pays offs the debts, etc. The procedure explains the whole process of winding up. At last, the article explores the reasons for winding up, who is a liquidator, and what are his powers and duties under section 290 of the Companies Act, 2013.