` HOW TO WIND UP A SICK COMPANY ??? by : DR. T.K. JAIN AFTERSCHO☺OL centre for social entrepreneurship sivakamu veterinary hospital road bikaner 334001 rajasthan, india FOR – PGPSE PARTICIPANTS mobile : 91+9414430763 5 DECEMBER 09
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WHAT IS WIND UP ?
As per sec. 425 of companies act, you can close a company (wind up ) by : 1. court order 2. voluntarily 3. under supervision of court 5 DECEMBER 09
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Wind up by court ????
You can go to court and request the court to wind up a company, if it is really not working properly, however, you have to apply to the court in whose jurisdiction the company is
5 DECEMBER 09
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Case : NCL Industries Ltd
Orissa High court refused to take application for winding up of a comapny having registered office in Hyderabad.
5 DECEMBER 09
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Wind up by court – process (sec. 433) Convince the court that the company : 1. is unable to pay debt 2. it is just and equitable to wind up the company 3. special resolution to wind up by court 3. non-submission of statutory report 4. no business for 1 year (any reason). 5 DECEMBER 09
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Can you apply for winding up ? Sec. 439 If you are any of these : creditor shareholder registrar representative of government company itself 5 DECEMBER 09
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Voluntary wind up.... As per sec. 488, a company can on its own wind up itself : as per : 1. by members 2. by creditors here the company will set up the process for winding up. However, the court can appoint official liquidator. 5 DECEMBER 09
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Winding up under supervision .... Liquidator (the person who sells the property of the company and settles its dues) is appointed only by court and he has to work only with the permission of the court. He gives his report to the court and takes permission from the court for all the actions (sale of property is also with permission of court). 5 DECEMBER 09
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Winding up of unregistered company (sec. 583) When there are 7 or more members in a company / partnership / firm the court may order for winding up if : 1.it is just and equitable 2. it is unable to pay to creditors 3. it has cesed to work so sick comapny (which is in huge losses and has eroded its networth or is not working) can also be wound up. 5 DECEMBER 09
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WHAT IS A PRODUCER COMPANY? As per Part IX A of companies act 56 (amended in 2002) sec. 583A (k) : producer means a person who is engaged in primary production. 10 or more producers or 2 or more institutions can make a producer company. Example : 10 carpet makers (workers) can make a company 5 DECEMBER 09
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