Winding Up

A shop on a Mumbai high street shuts its shutters one day and never reopens. The owner owes the landlord, the suppliers and the staff. If it is a partnership, the partners simply sort it out. If it is a company, the company is a separate person and cannot just vanish: someone has to collect its assets, pay its debts in the right order and only then let it die in law. That process is winding up. The question for this topic is how a company ends, who can start the process, what the Tribunal does and where the old voluntary route has gone.

In two minutes

Winding up is the legal process of ending a company by realising its assets, paying its debts in statutory order and dissolving it; under the Companies Act 2013 the Tribunal winds up a company on the grounds in s.271 on a petition under s.272, while voluntary liquidation of a solvent company is now governed by s.59 of the Insolvency and Bankruptcy Code 2016.

The rest of this chapter

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