DR.

RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY,

LUCKNOW
SESSION-2019

SYNOPSIS

CORPORATE LAW
TOPIC: VOLUNTARY WINDING UP

CLASS: B.A.LL.B. (HONS), VIth SEMESTER

SUBMITTED TO SUBMITTED BY
Ms. Priya Anuragini Anushthan tripathi

ASSISTANT PROFESSOR (LAW) ENROLLMENT NO.160101040

SECTION: A
 INTRODUCTION
VOLUNTARY WINDING UP (Section 488 of Companies Act, 1956)

The company and its creditors may apply to court for directions or orders but usually they are
left to settle their affairs within themselves. There are two kinds of voluntary winding
up, Member’s Voluntary winding up and Creditor’s voluntary winding up.

Members’ Voluntary Winding up

When the company is able to pay its debts, its Board of Directors makes a Declaration of
solvency stating that company would be able to pay debts within three years from the date of
commencement. Any false declaration made by director will be punishable up to 6 months or
fine up to Rs. 50000 or both.

Creditors’ Voluntary Winding up

When declaration of solvency is not made and delivered to the Registrar, it is case of
creditors’ voluntary winding up.

RESEARCH QUESTION
1. What are the kinds of voluntary winding up?

2. What are the circumstances under which a company may be wound up voluntarily?

3. What are the effects of voluntary winding up and processes involved in disposing the
company’s assets?

REVIEW OF LITERATURE
FRENCH DEREK “applications to wind up companies” OXFORD UNIVERSITY
PRESS, ed.3, 2015

This book deals with the procedure for obtaining a winding-up order chronologically from
presentation of a petition through to making the order. It also looks at the application process
as it applies to various classes of petitioner, such as creditors, contributories (shareholders)
and public officials.

The third edition is completely updated to cover new legislation and new procedures. It
includes new coverage of winding up through administrations, winding up insolvent
partnerships other than as unregistered companies, and considers the practice and procedure
issues of industry-specific administration regimes (from water companies to energy supply
companies) and their interaction with winding up. But the author does not talk about any
doctrine that need to be followed in India for the voluntary winding up of a company in India
neither it analyse the present judicial trends in Indian judiciary nor any comparative study.

ANANTHARAMAN K.S “LECTURES ON COMPANY LAW” LEXIS NEXIS,

ed.12,2015 pg no.351-355

The author in this book discussed about precisely about circumstances in which company
may be wound up voluntarily followed by declaration of solvency and the conditions required
for it. The author has further talked about commencement, effect, and cesser of winding up
and final meeting resulting to dissolution of company. The book doesn’t have a very
comprehensive approach and talked in a very precise manner regarding this topic and don’t
have in depth approach. Though its good as a quick reference or ready reckoner. Author has
missed various procedures such as appointment of company liquidator and notice to be given
to Registrar.

SINGH AVATAR “COMPANY LAW” EASTERN BOOK COMPANY CO, ed.16 ,2016
(page no.683-688)

The author has discussed about voluntary winding up in a very systematic and credible
manner. Starting from two ways of resolution involved to wound up a company, the author
has comprehensively enumerated the processes involved in winding up. The book also
contains the settlement procedures of assets of company after being wounded up and powers
of concerned tribunals regarding this process. This book gives detailed account about each
and every step involved in voluntary winding up.
INTRODUCTION

Winding up of a company might be required because of various reasons including conclusion of

business, misfortune, bankruptcy, passing endlessly of promoters, and so forth., The methodology
for winding up of a company can be initiated intentionally by the shareholders or creditors or by a
Tribunal. In this article, we take a gander at the methodology for winding up of a company
deliberately. On introduction of the winding up application, the court in the wake of hearing the
request of has the ability to either expel it or to make an interim request as it thinks suitable. It
can even appoint the temporary liquidator of the company till the passing of winding up arrange.
It can even appoint the temporary liquidator of the company till the passing of winding up
arrange. It might even make a request for winding up with or without cost. It is a procedure by
which the properties of the company are directed for the advantage of its members and creditors.
The individual designated for directing the advantages and liabilities is called Liquidator. If there
should be an occurrence of obligatory winding up, the outlet is delegated by the Tribunal under
section 275 of the Act; or, if there should be an occurrence of voluntary winding up, the outlet is
selected by the company itself under section 310 of the Act. Winding up is additionally alluded as
Liquidation.