COMPANY LAW –II

ASSINGMENT

WINDING UP OF A COMPANY UNDER IBC ACT, 2016

NAME- PREYASI DUTTA

ROLL NO. – R154217064

SAP ID- 500060369

BATCH- B.A.LLB CONSTITUTIONAL LAW

(2) The voluntary liquidation of a corporate person under sub-section (1) shall meet such conditions
and procedural requirements as may be specified by the Board.

(3) Without prejudice to sub-section (2), voluntary liquidation proceedings of a corporate person
registered as a company shall meet the following conditions, namely:—

(a) a declaration from majority of the directors of the company verified by an affidavit
stating that—

(i) they have made a full inquiry into the affairs of the company and they have formed an
opinion that either the company has no debt or that it will be able to pay its debts in full from the
proceeds of assets to be sold in the voluntary liquidation; and

(ii) the company is not being liquidated to defraud any person;

(b) the declaration under sub-clause (a) shall be accompanied with the following documents,
namely:—

(i) audited financial statements and record of business operations of the company for the
previous two years or for the period since its incorporation, whichever is later;

(ii) a report of the valuation of the assets of the company, if any prepared by a registered
valuer;

(c) within four weeks of a declaration under sub-clause (a), there shall be—

(i) a special resolution of the members of the company in a general meeting requiring the
company to be liquidated voluntarily and appointing an insolvency professional to act as the
liquidator; or

(ii) a resolution of the members of the company in a general meeting requiring the company
to be liquidated voluntarily as a result of expiry of the period of its duration, if any, fixed by its
articles or on the occurrence of any event in respect of which the articles provide that the company
shall be dissolved, as the case may be and appointing an insolvency professional to act as the
liquidator: Provided that the company owes any debt to any person, creditors representing
twothirds in value of the debt of the company shall approve the resolution passed under sub-clause
(c) within seven days of such resolution.

(4) The company shall notify the Registrar of Companies and the Board about the resolution under
sub-section (3) to liquidate the company within seven days of such resolution or the subsequent
approval by the creditors, as the case may be.
(5) Subject to approval of the creditors under sub-section (3), the voluntary liquidation proceedings
in respect of a company shall be deemed to have commenced from the date of passing of the
resolution under sub-clause (c) of sub-section (3).

(6) The provisions of sections 35 to 53 of Chapter III and Chapter VII shall apply to voluntary
liquidation proceedings for corporate persons with such modifications as may be necessary.

(7) Where the affairs of the corporate person have been completely wound up, and its assets
completely liquidated, the liquidator shall make an application to the Adjudicating Authority for the
dissolution of such corporate person.

(8) The Adjudicating Authority shall on an application filed by the liquidator under sub-section (7),
pass an order that the corporate debtor shall be dissolved from the date of that order and the
corporate debtor shall be dissolved accordingly.

(9) A copy of an order under sub-section (8) shall within fourteen days from the date of such order,
be forwarded to the authority with which the corporate person is registered.

Explanation of the above provisions –

APPLICATION FOR WINDING UP

A Company may decide to be twisted up willfully under a few conditions including ending up
because of expiry of time of activity fixed in its Articles of Association or event of an occasion gave in
its Articles of Association for its disintegration.

Conditions for willful liquidation of a Company:- a statement from dominant part of the executives
of the organization confirmed by an affirmation expressing that – Application for Voluntary
Liquidation:- A Company who plans to sell itself intentionally and has not submitted any default on
any obligation

(I) they have caused a full investigation into the undertakings of the organization and they
to have shaped a feeling that either the organization has no obligation or that it will
have the option to cover its obligations from the returns of resources for be sold in the
deliberate liquidation; and
(II) (ii) The organization isn't being sold to cheat any individual

(b) The revelation under sub-condition (a) will be went with the accompanying reports:

(I) Audited fiscal reports and record of business activities of the organization for the past two years
or for the period since its consolidation, whichever is later;

(ii) a report of the valuation of the benefits of the organization, assuming any, readied by a
Registered Valuer.
Assemble an executive gathering to talk about and favor following issues subject to the
endorsement of Members in the General Meeting:-

I. Willful ending up of the organization

Convene the Meeting of Members:-

Inside about a month of a statement, a part's goals for the willful ending up of the organization and
arrangement of indebtedness expert to go about as the outlet must be passed. Given that where the
corporate indebted person is an organization, lenders speaking to 66% in estimation of the
obligation owed to the organization need to help the goals inside seven days of such goals.

> The organization likewise needs to advise the Registrar of Companies in structure MGT-14 and the
Insolvency and Bankruptcy Board of India inside seven days of the death of the goals or ensuing
endorsement by the loan bosses all things considered.

> The organization likewise needs to advise the Registrar of Companies in structure GNL-2 with
respect to Declaration of Solvency and Appointment of Liquidator.

> Subject to endorsement of the lenders, the deliberate liquidation procedures in regard of an
organization will be considered to have started from the date of going of the goals all in all
gathering.

> Once the undertakings of the Company have been twisted up and its benefits totally exchanged,
the vendor will make an application to NCLT/Adjudicating Authority for the disintegration of such
Company.

> The Company will be broken up by the request for the NCLT/Adjudicating Authority

> Within 14 days from the date of such request a duplicate of the equivalent will be recorded with
the Registrar of Companies and other position where the organization is enlisted, assuming any.

IMPORATANT RULES AND REGULATIONS

> Appointment of Liquidator:- An indebtedness proficient will be qualified to be delegated as a

The vendor should make a Public Announcement (PA) in Form An inside 5 days from his
arrangement to be distributed in one English Newspaper and one Regional Language Newspaper
having wide dissemination where the enrolled office and the main office assuming any, of the
Company is arranged. It ought to likewise be shown on the site, of the Company; and on the site,
assigned by IBBI for his motivation.

> All cash to be paid in to Bank Account:-

Ledger should be opened in the Name of the Company followed by the words 'in willful liquidation'
in a booked bank by Liquidator.

> Verification of cases and rundown of partners:-

The outlet will confirm the cases submitted inside 30 days from the last date for receipt of cases and
may either concede or dismiss the case. Outlet will get ready rundown of partners inside 45 days
from the last date for receipt of cases.

> Distribution:-

The outlet will appropriate the returns inside a half year from the receipt of sum to the partners. The
liquidation costs will be deducted before such appropriation is made. The outlet may, with the
endorsement of the Company, disseminate among the partners, a benefit that can't be promptly or
favorably sold because of its unconventional nature or other exceptional conditions.

> Completion of liquidation:- The vendor will finish the whole procedure inside a year from the date
of initiation of liquidation.

> Final Report:-

To plan Final Report with subtleties comprising of – Details of Audited Accounts of Liquidation and
an announcement containing Disposal of Assets of the Company, Disposal of the obligations of the
Company as per the general inclination of leasers, Disposal of prosecution pending against/Sufficient
Provision for any commitment emerging out of any pending case; Statement of Sale of Assets
indicating Realized worth, Cost of Realization, Manner and Mode of Sale, Details of the individual to
whom the deal is made, Explanation expressing purposes behind shortage if the estimation of offer
acknowledged is not exactly the worth is appointed.
The Final report should send the ROC by recording GNL-2, The IBBI by means of Courier/E-mail and
the Adjudicating Authority i.e NCLT through Physical Filing.