1.
LIQUIDATOR
A person appointed to carry out the winding up of a company is called liquidator. If the winding up is through Court, the term used for such person is official liquidator. The duties of liquidator include getting in and realizing the property of the company, to pay its debts, and to distribute the surplus (if any) among the members. The official liquidator acts under the supervision of the Court, through a recognized reporting system. The following are the general powers of liquidator(s):1. To institute or defend any suit, action, prosecution or other legal proceeding, civil or criminal on behalf of the company. 2. To carry on the business of the company so far as may be necessary for the beneficial to it. 3. To pay to the creditors. 4. To make any compromise or arrangement with creditors. 5. To compromise all calls and liabilities to calls, debts and liabilities capable of resulting in debts. 6. To sell the movable and immovable property and things in action of the company by public auction or private contract, with power to transfer to any person or to sell the same in parcels. 7. To do all acts and to execute all deeds, receipts and other documents in the name and on behalf of the company and for that purpose to use in the companys seal when necessary. 8. To prove, rank and claim in the bankruptcy, insolvency or sequestration of any contributory for any balance against his estate and to receive dividends as a separate debt due from the bankrupt or insolvent in the bankruptcy. 9. To draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the company. 10. To raise on the security of the assets of the company any money.
3. Modes of winding up:
The winding up of a company may be either(i) By the Court; or (ii) Voluntary; or (iii) Subject to the supervision of the Court. 3.1 Winding up of the company by the Court: (i) The winding up of a company by an order of the Court is called the compulsory winding up. Section 305 of the Ordinance envisages the following circumstances, under which a company may be wound up by the Court on the petition submitted to it:(a) If the company has, by special resolution, resolved that the company be wound up by the Court; (b) If default is made in delivering the statutory report to the registrar or in holding the statutory meeting or any two consecutive annual general meetings; (c) If the company does not commence its business within a year from its incorporation, or suspends its business for a whole year; (d) If the number of members is reduced, in the case of private company, below two or, below three in case of public company and below seven in case of listed company.; (e) If the company is unable to pay its debts; (f) If the company is(i) Conceived or brought forth for, or is or has been carrying on, unlawful or fraudulent activities; (ii) Carrying on business not authorized by the memorandum;
(iii) Conducting its business in a manner oppressive to any of its members or persons concerned with the formation or promotion of the company or the minority shareholders; (iv) Run and managed by persons who fail to maintain proper and true accounts, or commit fraud, misfeasance or malfeasance in relation to the company; or (v) Managed by persons who refuse to act according to the requirements of the memorandum or articles or the provisions of this Ordinance or fail to carry out the directions or decisions of the Court or the registrar or the Commission given in the exercise of powers under this Ordinance; (g) If, being a listed company, it ceases to be such company; (h) If the Court is of opinion that it is just and equitable that the company should be wound up; or (i) Complete deadlock in the management of the company. (ii) Failure of companys main object. (iii) Recurring losses. (iv) Aggressive or oppressive policy of majority shareholders. (v) Incorporation of company for fraudulent or illegal purpose. (vi) Public interest. (i) If the company ceases to have a member. 3.1.1 Procedure for winding up of company and filing of petition before respective High Court: 1. To pass Special Resolution by 3/4th majority of the members of the company that the company be wound up by the Court in case if the company itself intend to file a petition and to file the Special Resolution on Form 26 with the registrar. 2. To prepare a list of the assets to ascertain that the company is unable to pay its debts. 3. To prepare a list of the creditors 4. In case of defaults in payments the creditor or creditors to make a decision for the filing of the winding up petition. 5. in case if the Commission or Registrar or a person authorized by the Commission intend to file a petition, they should not file a petition, for winding up of the company, unless an investigation into the affairs of the company has revealed that it was formed for any fraudulent or unlawful purpose or that it is carrying on a business not authorized by its memorandum or that its business is being conducted in a manner oppressive to any of its management has been guilty of fraud, misfeasance or other misconduct towards the company or towards any of its members. 6. To engage advocates for the preparation and filing of the petition. 3.1.2 Who is competent to file petition for winding up in the Court? Petition may be presented by any one of the following: 1. The company may itself by passing a special resolution 2. Creditor or Creditors. 3. Any contributory or contributories 4. Registrar of Companies (i) 5. Securities and Exchange
