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EQUITY SHARE
Meaning: Equity shares are those shares which are ordinary in the course of company's business. They are also called as
ordinary shares. These share holders do not enjoy preference regarding payment of dividend and repayment of
capital.Equity shareholders are paid dividend out of the profits made by a company. Higher the profits, higher will be the
dividend and lower the profits, lower will be the dividend.

Features of Equity Shares:

(1) Owned capital: Equity share capital is owned capital because it is the money of the shareholders who are actually the
owners of the company.

(2)Fixed value or nominal value: Every share has fixed value or a nominal value. For example, the price of a share is Rs.
10/- which indicates a fixed value or a nominal value.

(3) Distinctive number: Every share is given a distinct number just like a roll number for the purpose of identification.

(4) Attached rights: A share gives its owner the right to receive dividend, the right to vote, the right to attend meetings, the
right to inspect the books of accounts.

(5) Return on shares: Every shareholder is entitled to a return on shares which is known as dividend. Dividend depends on the
profits made by a company. Higher the profits, higher will be the dividend and vice versa.

(6) Transfer of shares: Equity shares are easily transferable, that is if a person buys shares of a particular company and he
does not want them, he can sell them to any one, thereby transferring the shares in the name of that person.

(7) Benefit of right issue: When a company makes fresh issue of shares, the equity shareholders are given certain rights in
the company. The company has to offer the new shares first to the equity shareholders in the proportion to their
existing share holding. In case they do not take up the shares offered to them, the same can be issue to others. Thus, equity
shareholders get the benefits of the right issue.

(8) Benefit of Bonus shares: Joint stock companies which make huge profits, issue bonus shares to their ordinary
shareholders out of the accumulated profits. These shares are issued free of cost in proportion to the number of existing equity
share holding. In case they do not take up the shares offered to them, the same can be issued to others. Thus, equity
shareholders get the benefits of the right issue.

(9) Irredeemable: Equity shares r always irredeemable. This means eqty capital is nt returnable during the life time of a comp

(10)Capital appreciation: The nominal or par value of equity shares is fixed but the market value fluctuates. The market value
mainly depends upon profitability and prosperity of the company. High rate of dividend is paid with high rate of profit,
the shareholders capital is appreciated through an appreciation in the market value of shares. (i.e. higher the rate of dividend,
higher the market value of the shares.)
PREFRENCE SHARE
Meaning: Preference shares are those shares which are given preference as regards to payment of dividend and repayment of
capital. Preference shareholders are given preference over equity shareholders as in the case of winding up of the company,
their capital is paid back first and then the equity shareholders are paid. Preference shareholders cannot exercise
their voting rights on all the matters. They can vote only on the matters affecting their own interest.

Features of Preference Shares:
y Return on investment: Preference shares are given preference to get a return on investment i.e. dividend. they are
paid dividend first out of the profits made by a company.
y Return of capital: These shareholders are paid their capital first in case of winding up of the company.
y Fixed dividend:Preference shares have a fixed rate of dividend and that is the reason they are
called fixed income securities. Whether D company hs low or high profits, they r entitled only 2 fixed rate of dividend.
y Non-participation in prosperity: On account of fixed dividends, these shares do not have any change to share in the
prosperity of the company's business. (except in case of participating preference shares.)
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y Non-participation in management: Preference shareholders do not participate in the management of the company's
affairs.
How to liquidate (wind up) a company
Introduction : Liquidation (or "winding up") is a process by which a companys existence is brought to an end.
First, a liquidator is appointed, either by the shareholders or the court. The liquidator represents the interests of all creditors. The liquidator supervises the
liquidation, which involves collecting and realising the companys assets (turning them into cash), discharging the companys liabilities, and distributing
any funds left over among the shareholders in accordance with the companys constitution (or the COMPANIES ACT 1993 if there is no constitution).
After these steps have been carried out, the company is formally dissolved.
What are the different types of liquidation?
The law classifies liquidations into two types: voluntary (which is by a shareholders resolution) or compulsory (by a court order).
Liquidations are also classified according to whether the company is solvent or insolvent.
Solvent and insolvent liquidations
If the company is insolvent, this means it is unable to pay its debts as they fall due. In this situation there is potential conflict between creditors (those to
whom money is owed), as there will be insufficient assets for all creditors to be paid in full.
The law attempts to maintain an equality between creditors, so the assets are distributed proportionately according to the size of each creditors claim.
However, the law gives priority to secured creditors (those with a charge over some of the companys property as security for the debt). In addition, a
number of rules exist to prevent one or more creditors from gaining an unfair advantage.
Voluntary liquidation (by shareholders resolution)
Voluntary liquidation refers to the process whereby the shareholders appoint a liquidator, who is then answerable to the creditors or shareholders. It is not
necessary to make any application to the court for this; however, the liquidator may apply to the court for directions and the court has power to remove a
liquidator.
A voluntary liquidation may also by commenced by the board of directors if an event specified in the companys constitution has occurred.
Voluntary liquidation may be in one of two forms, depending on whether or not the company is solvent. If the company is solvent the shareholders can
supervise the liquidation. However, if the company is insolvent, the creditors may take control of the liquidation process by applying to the court. The
court will require proof of solvency or insolvency to determine this matter.
Compulsory liquidation (by court order)
Compulsory liquidation of a company requires obtaining a court order. This process starts with an application to the court alleging that one or more of the
required grounds exist. The application may be brought by the company or a majority of its directors, or by the Registrar of Companies, or by a creditor.
Applications by creditors are by far the most important and common.
Applications may be brought on a number of grounds, the most important being that the company is unable to pay its debts. There are a number of
factors that the court will take into account when deciding whether or not to make a compulsory liquidation order. The court has a discretion as to
whether or not to make the order.
The procedure for liquidation
Broadly speaking, the liquidation process is as follows:
y A liquidator is appointed, either by the company shareholders passing a resolution (voluntary liquidation) or by the Court making an order
(compulsory liquidation).
y The liquidator collects the assets of the company (including uncalled capital; that is, amounts unpaid on shares) and pays the creditors in order
of priority.
y The liquidator distributes any surplus funds to the shareholders.
y The company is then formally dissolved.
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What are the consequences of liquidating a company?
The main consequences of the company being liquidated are as follows:
y The company no longer has the power to dispose of its property.
y The company may carry on business only for the li mited purpose of completing the liquidation process.
y The powers of the company directors come to an end when a liquidator is appointed.
y A liquidation order operates as a notice of dismissal to all of the companys employees. Note, however, that if an employee is on a fixed-term
contract and is required under this contract to be given a period of notice, then a liquidation order will breach this and the employee will be
entitled to damages.
y When an application is made for a court-ordered liquidation, the court may stay or restrain any proceedings against the company as the court
sees fit. When a liquidator is appointed, no person can begin or continue legal proceedings against the company or in relation to its property,
unless the liquidator agrees or the court permits it.
Order of distributing the companys assets
There is a hierarchy that determines the order in which a companys assets must be distributed in a liquidation. This is strictly enforced by the Courts.
Any secured creditors have the first right to the assets and are usually paid out before there is a distribution. After this is paid out, any remaining debts
are paid in the following order of priority:
1. the costs, charges and expenses involved in the liquidation
2. all wages and salaries payable to employees, including holiday pay
3. unsecured creditors
4. any interest that is attached to any debt (but only if the debt became due before the liquidation process began)
5. any debt owed to shareholders of the company, such as dividends or profits
Cautionary notes
The compulsory liquidation process cannot be used if there is a genuine dispute about the amount of debt owed by the company, because in this type of
situation the company cannot be said to have "neglected" to pay.

Llquldutlon of Compunles- Detulled Process
Wlndlng-up By Court:
A petltlon for wlndlng-up u compuny shull be ln Form No. 45, 46 or 47, us the cuse muy be, wlth such vurlutlons us the clrcumstunces muy
requlre, und shull be presented ln dupllcute. The Reglstrur shull note on the petltlon the dute of lts presentutlon. The petltlon shull be udvertlsed
wlthln the tlme und ln the munner provlded by rule 24 of these Rules. The udvertlsement shull be ln Form No. 48.
Appolntment of Offlclul Llquldutor:
After the udmlsslon of u petltlon for the wlndlng-up of u compuny by the Court, upon the uppllcutlon of u credltor, or u contrlbutory, or of the
compuny, und upon proof by ufflduvlt of sufflclent ground for the uppolntment of u Provlslonul Llquldutor, the Court, lf lt thlnks flt und upon such
terms us ln the oplnlon of the Court shull be |ust und necessury, muy uppolnt the Offlclul Llquldutor to be Provlslonul Llquldutor of the compuny
pendlng flnul orders on the wlndlng-up petltlon.
Offlclul Llquldutor to tuke churge of ussets und books und pupers of compuny:
On u wlndlng-up order belng mude, the Offlclul Llquldutor uttuched to the Court shull forthwlth tuke lnto hls custody or under hls control ull the
property und effects und the books und pupers of the compuny, und lt shull be the duty of ull persons huvlng custody of uny of the propertles,
books und pupers of the compuny, to dellver possesslon thereof to the Offlclul Llquldutor.
Appllcutlon for trunsfer:
Where u wlndlng-up order hus been mude by Hlgh Court, un uppllcutlon for u dlrectlon thut ull subsequent proceedlngs ln the wlndlng-up be hud
ln u Dlstrlct Court subordlnute to the Hlgh Court or ln uny other Hlgh Court or ln u Dlstrlct Court subordlnute thereto, shull be mude to the Hlgh
Court thut mude the wlndlng-up order by the Offlclul Llquldutor of thut Court, or by the Offlclul Llquldutor of the Court to whlch the proceedlngs
ure sought to be trunsferred, or by u credltor or contrlbutory of the compuny.
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Proceedlngs to be re-numbered:
Where proceedlngs ure trunsferred, they shull recelve u new dlstlnctlve number ln the Court to whlch they ure trunsferred, but below the new
number ln the cuuse-tltle, the prevlous number shull be shown ln bruckets us follows:
(Trunsferred Petltlon No......of 19..... of the Hlgh Court/Dlstrlct Court of.....)
Notlce to submlt stutement:
A notlce by the Offlclul Llquldutor requlrlng uny of the persons mentloned ln sub- sectlon (2) of sectlon 454 to submlt und verlfy u stutement of
uffulrs of the compuny shull be ln Form No. 55 und shull be served by the Offlclul Llquldutor us soon us muy be ufter the order for wlndlng-up or
the order uppolntlng the Offlclul Llquldutor us Provlslonul Llquldutor ls mude.
Appllcutlon by Offlclul Llquldutor under sectlon 454(2):
The Offlclul Llquldutor muy upply by summons to the Court for un order dlrectlng uny person who, ln hls oplnlon, ls lluble to furnlsh u stutement
of uffulrs under sectlon 454, to prepure und submlt such u stutement or concur ln muklng the sume. Notlce of the uppllcutlon shull be served on
the person ugulnst whom the order ls sought. Where the Court mukes the order, such order shull be ln Form No. 56 wlth such vurlutlons us muy
be necessury.
Prepurutlon of stutement of uffulrs:
Any person who under sectlon 454 ls requlred to submlt und verlfy u stutement us to the uffulrs of the compuny shull be furnlshed by the Offlclul
Llquldutor wlth the necessury forms und shull be glven such lnstructlons und ufforded such reusonuble fucllltles for prepurlng the stutement us the
Offlclul Llquldutor muy ln hls dlscretlon conslder necessury.
Offlcers of compuny to uttend und glve lnformutlon:
The Offlclul Llquldutor muy from tlme to tlme hold personul lntervlews wlth uny such person us ls mentloned ln sub-sectlon (2) of sectlon 454 for
the purpose of lnvestlgutlng the compunys uffulrs, und lt shull be the duty of every such person to uttend on the Offlclul Llquldutor ut such tlme
und pluce us the Offlclul Llquldutor muy uppolnt und glve the Offlclul Llquldutor ull lnformutlon thut he muy requlre und unswer ull such questlons
us muy be put to hlm by the Offlclul Llquldutor. The Offlclul Llquldutor shull mulntuln mlnutes of the lntervlews held by hlm or memorundu
contulnlng the substunce of such lntervlews.
Llquldutor ln voluntury wlndlng-up or wlndlng-up sub|ect to supervlslon, to submlt stutement:
Where before the muklng of the wlndlng-up order the compuny wus belng wound-up volunturlly or sub|ect to the supervlslon of the Court, the
Offlclul Llquldutor muy requlre uny llquldutor or llquldutors ln such wlndlng-up to furnlsh hlm, not luter thun 14 duys of hls muklng the requlsltlon,
or such other tlme us he muy flx, wlth u stutement us to the munner ln whlch the wlndlng-up wus conducted, how the ussets of the compuny were
deult wlth, und the posltlon of the llquldutlon on the dute of the order for wlndlng-up by the Court; und on the requlsltlon belng mude, lt shull be
the duty of the llquldutor or llquldutors so requlred to furnlsh the stutement wlthln the tlme llmlted. Where the llquldutor or llquldutors full to
furnlsh the stutement us requlred, the Offlclul Llquldutor muy upply to the Court for such dlrectlons us muy be necessury.
Prellmlnury report by Offlclul Llquldutor:
The prellmlnury report to be submltted by the Offlclul Llquldutor under sub-sectlon (1) of sectlon 455 shull be ln Form No. 60 wlth such vurlutlons
us muy be necessury.
Inspectlon of stutement und prellmlnury report:
Every credltor or contrlbutory, by hlmself or by hls ugent, shull be entltled to lnspect the stutement of uffulrs submltted under sectlon 454 or the
stutement submltted by u llquldutor under rule 134 of these Rules, und the prellmlnury report of the Offlclul Llquldutor submltted under sectlon
455(1), on puyment of u fee of Re. 1 und to obtuln coples thereof or extructs there from on puyment of the prescrlbed churges.
Conslderutlon of report by Court:
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The conslderutlon of the report (or reports) mude by the Offlclul Llquldutor pursuunt to sub-sectlon (2) of sectlon 455, shull be before the Judge ln
Chumbers, und the Offlclul Llquldutor shull personully or by counsel uttend the conslderutlon thereof und glve the court uny further lnformutlon or
explunutlon wlth reference to the mutters contulned thereln whlch the Court muy requlre. On u conslderutlon of the report (or reports), the Court
muy puss such orders und glve such dlrectlons us lt muy thlnk flt lncludlng dlrectlons under sectlon 478.
Summons for dlrectlons to be tuken out by Offlclul Llquldutor:
(1) As soon us pructlcuble ufter the wlndlng-up order ls mude und ln uny event not luter thun 7 duys ufter the flllng of hls prellmlnury report under
sub-sectlon (1) of sectlon 455, the Offlclul Llquldutor shull tuke out u summons for dlrectlons wlth regurd to the settlement of the llst of
contrlbutorles und the llst of credltors und the exerclse by the Offlclul Llquldutor of ull or uny of the powers under sectlon 457(1) und uny other
mutters requlrlng dlrectlons of the Court. Notlce of the summons shull be glven to the petltloner on whose petltlon the order for wlndlng-up wus
mude. Upon the heurlng of the summons, the Court, ufter heurlng the Offlclul Llquldutor und uny other person uppeurlng on notlce or otherwlse,
muy glve such dlrectlons us lt shull thlnk flt ln regurd to the suld mutters, lncludlng the flxlng of dutes for the settlement of the llst of contrlbutorles
und for the flllng of proofs by the credltors of the compuny ln respect of thelr debts und thelr clulms for prlorlty lf uny under sectlon 530.
(2) Where the prellmlnury report of the Offlclul Llquldutor ls not flled prlor to the heurlng of the summons und uny of the mutters ln the summons
cunnot be properly or fully deult wlth wlthout u perusul of such report, the Court muy ud|ourn the heurlng of uny such mutter or mutters on the
summons untll ufter the submlsslon of the prellmlnury report.
Flrst meetlng of credltors und contrlbutorles:
The meetlngs of the credltors und contrlbutorles under sectlon 464 for the purpose of determlnlng whether there shull be u Commlttee of
Inspectlon, und lf so, whut shull be lts composltlon, shull be convened, held und conducted ln the munner herelnufter provlded by these Rules for
the holdlng und conductlng of meetlngs of credltors und contrlbutorles.
Offlclul Llquldutor to report results of meetlng und upply for dlrectlons:
As soon us posslble ufter the holdlng of the suld meetlngs, the Offlclul Llquldutor shull report the result thereof to the Court. Such report shull be
ln Form No. 61. Where the meetlng of the contrlbutorles hus not uccepted the declslon of the credltors meetlng ln lts entlrety, the Offlclul
Llquldutor shull, ut the tlme of muklng hls report us uforesuld, upply to the Court for dlrectlons us to whether there shull be u Commlttee of
Inspectlon, und lf so, whut shull be lts composltlon, und who shull be the members thereof, und the Court shull thereupon flx u dute for the
conslderutlon of the resolutlons und determlnutlons of the meetlngs of the credltors und contrlbutorles. Notlce of the dute so flxed shull be
udvertlsed by the Offlclul Llquldutor ln such munner us the Court shull dlrect not less thun 7 duys before the dute flxed. The udvertlsement shull
be ln Form No. 62.
Flxlng u dute for provlng debts:
Sub|ect to the provlslons of the Act, und ln u wlndlng-up by the Court, sub|ect to the dlrectlons of the Court, the Offlclul Llquldutor ln u wlndlng-up
by the Court shull, und the Llquldutor ln uny other wlndlng-up muy, flx u certuln duy, whlch shull be not less thun 14 duys from the dute of the
notlce to be glven under the next succeedlng Rule, on or before whlch the credltors of the compuny ure to prove thelr debts or clulms und to
estubllsh uny tltle they muy huve to prlorlty under sectlon 530, or to be excluded from the beneflt of uny dlstrlbutlon mude before such debts or
clulms ure proved, or, us the cuse muy be, from ob|ectlng to such dlstrlbutlon.
Notlce to credltors.
(1) The Llquldutor shull glve not less thun 14 duys notlce of the dute so flxed by udvertlsement ln one lssue of u dully newspuper ln the Engllsh
lunguuge und one lssue of u dully newspuper ln the reglonul lunguuge clrculutlng ln the Stute or Unlon Terrltory concerned, us he shull conslder
sultuble. Such udvertlsement shull be ln Form No. 63.
(2) The Llquldutor shull ulso glve not less thun 14 duys notlce of the dute flxed, ln u wlndlng-up by the Court, to every person mentloned ln the
stutement of uffulrs us u credltor, who hus not proved hls debt, und to every person mentloned ln the stutement of uffulrs us u preferentlul credltor,
whose clulm to be u preferentlul credltor hus not been estubllshed or ls not udmltted, or, where there ls no stutement of uffulrs, to the credltors us
uscertulned from the books of the compuny, und, ln uny other wlndlng-up, to euch person who, to the knowledge of the Llquldutor, clulms to be u
credltor or preferentlul credltor of the compuny und whose clulm hus not been udmltted, to the lust known uddress or pluce of ubode of such
person. Such notlce shull be ln Form No. 64 or 65, us the cuse muy be, und shull be sent to euch credltor by pre-puld letter post under certlflcute
of postlng.
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Offlclul Llquldutors rlght to summon uny person ln connectlon wlth the lnvestlgutlon.
The Offlclul Llquldutor ln u wlndlng-up by the Court muy summon uny person whom he muy deem cupuble of glvlng lnformutlon respectlng the
debts to be proved ln llquldutlon und muy requlre such person to produce uny documents ln hls custody or power relutlng to such debts und shull
tender wlth the summons such sum us uppeurs to the Offlclul Llquldutor sufflclent to defruy the truvelllng und other expenses of the person
summoned for one duys uttendunce. Where the person so summoned fulls wlthout luwful excuse to uttend or produce uny documents ln
compllunce wlth the summons or uvolds or evudes servlce, the Offlclul Llquldutor muy upply to the Court for the lssue of u wurrunt for the
upprehenslon of such person und the productlon before hlm of such documents us muy be requlred, or for other upproprlute orders.
Ouths: For the purpose of hls dutles ln relutlon to the udmlsslon of proof of debts, the Offlclul Llquldutor muy udmlnlster ouths und tuke ufflduvlts.
Appeul by credltor.
If u credltor ls dlssutlsfled wlth the declslon of the Llquldutor ln respect of hls proof, the credltor muy, not luter thun 21 duys from the dute of
servlce of the notlce upon hlm of the declslon of the Llquldutor, uppeul to the Court ugulnst the declslon. The uppeul shull be mude by u Judges
summons; supported by un ufflduvlt whlch shull set out the grounds of such uppeul, und notlce of the uppeul shull be glven to the Llquldutor. On
such uppeul, the Court shull huve ull the powers of un uppellute Court under the Code.
Procedure where credltor uppeuls:
(1) The Llquldutor shull, upon recelvlng notlce of the uppeul ugulnst u declslon re|ectlng u proof wholly or ln purt, flle wlth the Reglstrur such
proof wlth the order contulnlng the grounds of re|ectlon.
(2) It shull be open to uny credltor or contrlbutory to upply to the Court for leuve to lntervene ln the uppeul, und the Court muy, lf lt thlnks flt, grunt
the leuve sub|ect to such terms und condltlons us muy be |ust. Where such leuve hus been grunted notlce of the heurlng of the uppeul shull be
glven to such credltor or contrlbutory.
Offlclul Llquldutor not to be personully lluble for costs:
The Offlclul Llquldutor shull ln no cuse be personully lluble for costs ln relutlon to un uppeul from hls declslon re|ectlng uny proof wholly or ln
purt.
Proofs und llst of credltors to be flled ln Court:
In u wlndlng-up by the Court, the Offlclul Llquldutor shull, wlthln three months from the dute flxed for the submlsslon of proofs under rule 147 of
these rules or such further tlme us the Court muy ullow, flle ln Court u certlflcute ln Form No. 71 contulnlng u llst of the credltors who submltted to
hlm proofs of thelr clulms ln pursuunce of the udvertlsement und the notlces referred to ln rule 148, the umounts of debt for whlch they clulmed to
be credltors, dlstlngulshlng ln such llst the proofs udmltted wholly, the proofs udmltted or re|ected ln purt, und the proofs wholly re|ected. The
proofs, wlth the memorundum of udmlsslon or re|ectlon of the sume ln whole or ln purt, us the cuse muy be, endorsed thereon, shull be flled ln
Court ulong wlth the certlflcute.
Llst of credltors not to be vurled:
The llst us certlfled by the Offlclul Llquldutor und flled ln Court shull be the llst of the credltors of the compuny, und shull not be udded to or vurled
except under orders of Court und ln uccordunce wlth such orders. Where un order ls mude uddlng to or vurylng the llst of credltors, the Offlclul
Llquldutor shull umend the llst ln uccordunce wlth such order.
Llst of proofs und summons for dlrectlons:
Where the wlndlng-up ls ln u Dlstrlct Court, the Offlclul Llquldutor uttuched to the Court shull, ufter such lnvestlgutlon us he muy thlnk necessury,
muke out und flle ln the Court, wlthln two months of the dute flxed for the submlsslon of proofs under rule 147 of these rules, or wlthln such
extended tlme us the Court muy ullow, u llst verlfled by hls ufflduvlt of ull the debts und clulms sent to hlm, dlstlngulshlng ln such llst whlch of the
debts und clulms or purts thereof ure ln hls bellef |ustly due und proper to be ullowed wlthout further evldence, wlth the reusons for hls bellef, und
whlch of them ought to be proved by the credltors, und shull ulso flle wlth the llst ull the proofs und the evldence recelved by hlm from the severul
credltors ln connectlon wlth thelr clulms. He shull ut the sume tlme tuke out u summons for the settlement of the llst of credltors by the Court. The
ufflduvlt verlfylng the llst shull be ln Form No. 72 und the summons shull be ln Form No. 73.
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Dlrectlon ut heurlng of summons:
It shull not be necessury to lssue notlce of the summons ln the flrst lnstunce und the summons shull be posted before the Court for dlrectlons
together wlth the llst of credltors und the ufflduvlt verlfylng the sume, flled by the Offlclul Llquldutor. Upon the heurlng thereof, the Court muy
ullow such of the debts und clulms or such purts thereof us ln the oplnlon of the Court do not requlre further proof, und shull requlre further proof
of such of the debts und clulms or purts thereof us ln the oplnlon of the Court requlre to be proved by the clulmunts. The Court shull flx u dute for
the ud|udlcutlon of the clulms whlch ure to be proved, und shull ud|ourn the summons to the dute so flxed.
Notlce to be glven to credltors.
Not less thun 14 duys before the dute flxed for the proof of clulms under the lust precedlng rule, the Offlclul Llquldutor shull glve notlce by
reglstered post lndlvlduully to euch of the credltors who ure requlred to prove thelr debts or clulms or purts thereof, us the cuse muy be, to come ln
und prove before the Court on the dute flxed. Such notlce shull be ln Form No. 74. The Offlclul Llquldutor shull ulso glve notlce of the udmlsslon
of thelr clulms by post lndlvlduully to the credltors whose clulms huve been udmltted.
Settlement of llst of credltors:
On the dute flxed or on uny ud|ourned dute, the Court shull, ufter heurlng such evldence us muy be tendered, ud|udlcute upon the clulms und settle
the llst of credltors. The settlement of the llst of credltors shull be recorded ln u certlflcute slgned by the Judge ln Form No. 75.
Provlslonul llst of contrlbutorles:
(1) Unless the Court dlspenses wlth the settlement of u llst of contrlbutorles, the Offlclul Llquldutor shull prepure und flle ln the Court not luter
thun 21 duys ufter the dute of the order on the uppllcutlon for dlrectlons referred to ln rule 139 of these Rules, u provlslonul llst of contrlbutorles of
the compuny wlth thelr numes und uddresses, the number of shures or the extent of lnterest to be uttrlbuted to euch contrlbutory, the umount
culled up und the umount puld up ln respect of such shures or lnterest, und dlstlngulshlng ln such llst the severul clusses of contrlbutorles.
(2) The llst shull conslst of every person who wus u member of the compuny ut the commencement of the wlndlng-up or hls representutlve, und
shull be dlvlded lnto two purts, the flrst purt conslstlng of those who ure contrlbutorles ln thelr own rlght, und the second purt, of those who ure
contrlbutorles us belng representutlves of, or lluble for the debts of, others. The llst shull be ln Form No. 76.
Notlce to be glven of dute of settlement of llst.
(1) Upon the flllng of the provlslonul llst, the Offlclul Llquldutor shull, sub|ect to uny dlrectlons of the Judge on the uppllcutlon for dlrectlons
referred to ln rule 139 of these rules, flx u dute not luter thun one month from the dute of the flllng of the provlslonul llst for the settlement of the
llst before hlm, und shull glve notlce thereof to every person lncluded ln such llst, stutlng ln such notlce ln whut churucter und for whut number of
shures or extent of lnterest such person ls lncluded ln the llst, the umount culled up und the umount puld up ln respect of such shures or lnterest.
Such notlce shull be ln Form No. 77 und shull be sent by pre-puld letter post under certlflcute of postlng to every person lncluded ln the llst ut the
uddress mentloned thereln so us to reuch hlm ln the ordlnury course of post not luter thun 14 duys before the dute flxed for the settlement.
(2) The person who posted the notlces shull sweur to un ufflduvlt ln Form No. 78 relutlng to the desputch thereof und the ufflduvlt shull be flled
wlth the proceedlngs.
Settlement of the llst
On the dute flxed for the settlement of the llst, the Offlclul Llquldutor shull heur uny person who ob|ects to belng settled us u contrlbutory or to
belng settled us u contrlbutory ln such churucter or for such number of shures or extent of lnterest us ls mentloned ln the provlslonul llst, und ufter
such heurlng, shull flnully settle the llst. The llst when so settled shull be the llst of contrlbutorles of the compuny.
Certlflcute of flnul settlement to be flled ln Court
Wlthln 7 duys ufter the settlement of the llst the Offlclul Llquldutor shull flle ln Court u certlflcute of the llst of contrlbutorles us flnully settled by
hlm. Such certlflcute shull be ln Form No. 79.
Notlce of settlement to contrlbutorles
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(1) Upon the flllng of the certlflcute, the Offlclul Llquldutor shull forthwlth glve notlce to every person pluced on the llst of contrlbutorles us flnully
settled, stutlng ln whut churucter und for whut number of shures or lnterest he hus been pluced on the llst, whut umount hus been culled up und
whut umount puld up ln respect of such shures or lnterest, und ln the notlce he shull lnform such person thut uny uppllcutlon for the removul of hls
nume from the llst or for u vurlutlon of the llst, must be mude to the Court wlthln 21 duys from the dute of servlce on the contrlbutory of such
notlce. Such notlce shull be ln Form No. 80, und shull be sent to euch person settled on the llst by pre-puld reglstered post for ucknowledgement
ut the uddress mentloned ln the llst us settled.
(2) An ufflduvlt of servlce relutlng to the desputch of the notlces to the contrlbutorles under thls rule shull be sworn to by the person who
desputched the suld notlces und shull be flled ln Court wlthln 14 duys of the flllng by the Offlclul Llquldutor of hls certlflcute of the llst of
contrlbutorles under rule 183 of these rules. Such ufflduvlt shull be ln Form No. 81.
Court meetlngs, Llquldutors meetlngs und voluntury Llquldutlon meetlngs.
(1) In uddltlon to the meetlngs of credltors und contrlbutorles whlch muy be dlrected to be held by the Court under sectlon 557, herelnufter
referred to us Court meetlngs of credltors und contrlbutorles, the Offlclul Llquldutor muy, ln u wlndlng-up by the Court, us und when he thlnks flt,
summon und hold meetlngs of the credltors und contrlbutorles, hereln- ufter referred to us Llquldutors meetlngs of credltors und contrlbutorles,
for the purpose of uscertulnlng thelr wlshes ln ull mutters relutlng to the wlndlng-up und such meetlngs shull be summoned, held und conducted ln
the munner provlded by these Rules und sub|ect to the control of the Court.
(2) In u credltors voluntury wlndlng-up, the llquldutor muy hlmself from tlme to tlme summon, hold und conduct meetlngs of credltors for the
purpose of uscertulnlng thelr wlshes ln ull mutters relutlng to the wlndlng up(Such meetlngs und ull meetlngs of credltors whlch u llquldutor of u
compuny ls by the Act requlred to convene ln or lmmedlutely before such u voluntury wlndlng-up und ull meetlngs convened by u credltor ln u
voluntury wlndlng-up under these Rules ure herelnufter culled voluntury llquldutlon meetlngs).
Attendunce ut proceedlngs:
(1) Suve us otherwlse provlded by these rules or by un order of Court, every person for the tlme belng on the llst of contrlbutorles of the compuny
und every credltor whose debt hus been udmltted by the Offlclul Llquldutor wholly or ln purt shull be ut llberty ut hls own expense to uttend the
proceedlngs before the Court or before the Offlclul Llquldutor und shull be entltled upon puyment of the costs occusloned thereby to huve notlce
of ull such proceedlngs us he shull, by request ln wrltlng uddressed to the Offlclul Llquldutor, deslre to huve notlce of ; but lf the court shull be of
oplnlon thut the uttendunce of uny such person hus occusloned uny uddltlonul costs whlch ought not to be borne by the funds of the compuny, lt
muy dlrect such costs or u gross sum ln lleu thereof to be puld by such person und such person shull not be entltled to uttend uny further
proceedlngs untll he hud puld the sume.
(2) No contrlbutory or credltor shull be entltled to uttend uny proceedlngs before the Judge, unless und untll he or un Advocute on hls behulf hus
flled un uppeurunce wlth the Reglstrur. The Reglstrur shull keep un Appeurunce Book ln whlch ull such uppeurunces shull be entered. Such book
shull be open to the lnspectlon of the Offlclul Llquldutor.
Powers of Offlclul Llquldutor:
The dutles lmposed on the Court by sub-sectlon (1) of sectlon 467 wlth regurd to the collectlon of the ussets of the compuny und the uppllcutlon of
the ussets ln dlschurge of the compunys llubllltles shull be dlschurged by the Offlclul Llquldutor us un offlcer of the Court sub|ect to the control of
the Court und to the provlso ln sectlon 643(2)
Offlclul Llquldutor to be ln the posltlon of u Recelver:
For the dlschurge by the Offlclul Llquldutor of the dutles lmposed by sub-sectlon (1) of sectlon 467 und the lust precedlng rule the Offlclul
Llquldutor shull, for the purpose of ucqulrlng und retulnlng possesslon of the property of the compuny, be ln the sume posltlon us lf he were u
Recelver of the property uppolnted by the Court, und the court muy on hls uppllcutlon enforce such ucqulsltlon or retentlon uccordlngly.
Compunys property to be surrendered to Offlclul Llquldutor on requlsltlon:
The powers conferred on the Court by sectlon 468 muy be exerclsed by the Offlclul Llquldutor. Any contrlbutory for the tlme belng on the llst of
contrlbutorles, trustee, recelver, bunker or ugent or offlcer of u compuny whlch ls belng wound up under order of the Court, shull on notlce from
the Offlclul Llquldutor und wlthln such tlme us he shull by notlce requlre, puy, dellver, convey, surrender or trunsfer to or lnto the hunds of the
Offlclul Llquldutor uny money, property or documents, books or pupers whlch huppen to be ln hls hunds for the tlme belng und to whlch the
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compuny ls prlmu fucle entltled. Where the person so requlred fulls to comply wlth the notlce, the Offlclul Llquldutor muy upply to the Court for
upproprlute orders. The notlce shull be ln Form No. 99.
Offlclul Llquldutor to reullse unculled cupltul:
Notwlthstundlng uny churge or encumbrunce on the unculled cupltul of the compuny, the Offlclul Llquldutor shull ulone be entltled to cull und
reullse the unculled cupltul of the compuny und to collect the urreurs lf uny due on culls mude prlor to the wlndlng-up, but shull hold ull moneys so
reullsed sub|ect to the rlghts, lf uny, of the holder of uny such churge or encumbrunce.
Appllcutlon for leuve to muke cull.
(1) The Offlclul Llquldutor shull not muke uny cull wlthout obtulnlng the leuve of the Court for the purpose.
(2) At uny tlme ufter the settlement of the llst of contrlbutorles, the Offlclul Llquldutor muy upply by summons to the Court for leuve to muke u cull
on the contrlbutorles. The summons shull stute the proposed umount of such cull und shull be ln Form No. 100. It shull be supported by the
ufflduvlt of the Offlclul Llquldutor whlch shull be ln Form No. 101.
Appllcutlon for exumlnutlon under sectlon 477:
(1) An uppllcutlon for the exumlnutlon of u person under sectlon 477 muy be mude ex purte, provlded thut where the uppllcutlon ls mude by uny
person other thun the Offlclul Llquldutor, notlce of the uppllcutlon shull be glven to the Offlclul Llquldutor
(2) The summons shull be ln Form No. 109 und, where the uppllcutlon ls by the Offlclul Llquldutor, shull be uccompunled by u stutement slgned
by hlm settlng forth the fucts on whlch the uppllcutlon ls bused. Where the uppllcutlon ls mude by u person other thun the Offlclul Llquldutor, the
summons shull be supported by un ufflduvlt of the uppllcunt settlng forth the mutters ln respect of whlch the exumlnutlon ls sought und the
grounds relled on ln support of the summons.
Order for publlc exumlnutlon under sectlon 478:
Where un order ls mude for the exumlnutlon of uny person or persons under sectlon 478, the exumlnutlon shull be held before the Judge; provlded
thut ln the cuse of u Hlgh Court, the Judge muy dlrect thut the whole or uny purt of the exumlnutlon of uny such person or persons, be held before
uny of the offlcers mentloned ln sub-sectlon (10) of the suld sectlon us muy be mentloned ln the order. Where the dute of the exumlnutlon hus not
been flxed by the order, the Offlclul Llquldutor shull tuke un uppolntment from the Judge or offlcer before whom the exumlnutlon ls to be held us
to the dute of the exumlnutlon. The order dlrectlng u publlc exumlnutlon shull be ln Form No. 112.
No clulm to be compromlsed or ubundoned wlthout sunctlon of Court.
In u wlndlng-up by or sub|ect to the supervlslon of the Court no clulm by the compuny ugulnst uny person shull be compromlsed or ubundoned by
the Llquldutor wlthout the sunctlon of the Court upon notlce to such person us the Court muy dlrect.
Sule to be sub|ect to sunctlon und to conflrmutlon by Court: Unless the Court otherwlse orders, no property belonglng to u compuny whlch ls
belng wound-up by the Court shull be sold by the Offlclul Llquldutor wlthout the prevlous sunctlon of Court und every sule shull be sub|ect to
conflrmutlon by the Court.
Declurutlon of dlvldend or return of cupltul:
No dlvldend to credltors or return of cupltul to contrlbutorles shull be declured by the Offlclul Llquldutor wlthout the sunctlon of the Court.
Offlclul Llquldutor to upply for dlssolutlon: As soon us the uffulrs of the compuny huve been fully wound-up, the Offlclul Llquldutor ln u wlndlng-
up by the Court shull flle hls flnul uccount lnto Court und upply for orders us to the dlssolutlon of the compuny sub|ect to hls flnul uccount belng
pussed ln uccordunce wlth these Rules. The uppllcutlon shull not be set down for heurlng untll the completlon of the uudlt of the flnul uccount und
the flllng of the uudltors certlflcute ln relutlon thereto.
Dlssolutlon of the compuny: Upon the heurlng of the uppllcutlon, the Court muy, ufter heurlng the Offlclul Llquldutor und uny other person to
whom notlce muy huve been ordered by the Court, und upon peruslng the uccount us uudlted, muke such orders us lt muy thlnk flt us to the
dlssolutlon of the compuny, the uppllcutlon, sub|ect to the provlslons of the Act, of the bulunce ln the hunds of the Offlclul Llquldutor or the
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puyment thereof lnto the Compunles Llquldutlon Account ln the publlc uccount of Indlu ln the Reserve Bunk of Indlu, und the dlsposul of the
books und pupers of the compuny und of the Llquldutor.
Llquldutor to puy the bulunce lnto publlc uccount:
Upon un order for dlssolutlon belng mude, the Offlclul Llquldutor shull forthwlth puy lnto the Compunles Llquldutlon Account ln the publlc uccount
of Indlu ln the Reserve Bunk of Indlu uny unclulmed dlvldends puyuble to credltors, or undlstrlbuted ussets refunduble to contrlbutorles ln hls
hunds on the dute of the order of dlssolutlon, und such other bulunce ln hls hunds us he hus been dlrected by the Court to deposlt lnto the
Compunles Llquldutlon Account ln the Reserve Bunk of Indlu. Every order of dlssolutlon shull dlrect thut the Offlclul Llquldutor do forwurd u
certlfled copy of the order to the Reglstrur of Compunles not luter thun 14 duys from the dute of the order. Along wlth the copy of the order shull
be flled wlth the Reglstrur of Compunles u stutement slgned by the Offlclul Llquldutor thut the dlrectlons of the Court regurdlng the uppllcutlon of
the bulunce us per hls flnul uccount huve been duly complled wlth.
Concluslon of wlndlng-up: The wlndlng-up of u compuny shull, for purposes of sectlon 551, be deemed to be concluded
(u) In the cuse of u compuny wound-up by order of the Court, ut the dute on whlch the order dlssolvlng the compuny hus been reported by the
Llquldutor to the Reglstrur of Compunles;
(b) ln the cuse of u compuny wound-up volunturlly, or under the supervlslon of the Court, ut the dute of the dlssolutlon of the compuny, unless ut
such dute uny fund or ussets of the compuny remuln unclulmed or undlstrlbuted ln the hunds or under the control of the llquldutor, or uny person
who hus ucted us llquldutor, ln whlch cuse the wlndlng-up shull not be deemed to be concluded untll such funds or ussets huve elther been
dlstrlbuted or puld lnto the Compunles Llquldutor Account ln the Reserve Bunk of Indlu.
Appllcutlon to declure dlssolutlon vold:
An uppllcutlon under sectlon 559 shull be mude upon notlce to the Centrul Government und the Reglstrur of Compunles. Where the Court
declures the dlssolutlon to huve been vold, the order shull dlrect thut the uppllcunt do flle u certlfled copy of the order wlth the Reglstrur of
Compunles not luter thun 21 duys from the dute of the order.