Q.27 Describe the members voluntary winding up and creditor’s voluntary winding up of Joint Stock Company.
Ans: VOLUNTARY WINDING UP IS SUBDIVIDEND INTO
(1) Members voluntary winding up
(2) Creditor voluntary winding up
1. PROCEDURE IN MEMBER’S VOLUNTARY WINDING UP
To bring about a member’s voluntary winding up the following conditions must be satisfied.
(a) STATUTORY DECLARATION
The majority of director makes a statutory declaration of solvency for submission to registrar intimating him that having made full enquiry into the company’s affairs, they of the opinion that the company will be able to pay its debts in full with in three years from the commencement of the winding up.
SPECIAL ORDINARY RESOLUTION
After the declaration of solvency has been submitted to registrar, the company in general meeting passes the ordinary or special resolution as the case may be for the winding up of the company.
(c) APPOINTMENT OF LIQUIDATOR
The company in general meeting appoints a liquidator to wind up the company’s affairs and dis-1bute its assets. The remuneration of liquidator may be fixed in this meeting. On the appointment of liquidator, all the powers of directors and other officers end except so far as the company in its general meeting or the liquidator himself sanctions their continuance. When ten days after the appointment of liquidator the notice regarding the appointment must be sent to regular.
(d) FINAL PROCESS OF WINDING UP
If the winding up continues for more than one year, the liquidator has to call general meeting of the company at the end of each year. When the company’s affairs are fully wound up, he has to call final meeting of the shareholders. At this meeting the liquidator must submit a final account of the company’s affairs to the members. Within one week after the final meeting, the liquidator must file with registrar a copy of the accounts and a return of the holding of the meeting. At the end of three months from the date of registration of return, the company is dissolved and its name is struck of the Register of Joint Stock Companies.
CREW TORS VOLUNTARY WINDING UP
The procedure for a creditor’s voluntary winding up is follows.
(a) SOLVENCY DECLARATION
Statutory declaration regarding solvency of the company is not necessary in case of creditor’s voluntary winding up.
(b) GENERAL MEETING
A general meeting of the company will be called for the purpose of passing extra – ordinary resolution. This resolution is required for the winding for the winding up of the company because it cannot continue its business of its liabilities.
(c) CREDITOR’S MEETING
The company must call a meeting of the creditors on the same day or on the following day after the general meeting of the company. A notice must be sent in writing to each creditor for this purpose.
(d) STATEMENT COMPANY’S POSITION
The direction of the company must be lay before creditors a full statement of company’s position, a list of creditors and their estimated claims. A direction of the company, appointed by other direction must preside the creditor meeting.
(e) INTIMATION TO REGISTRAR
The information regarding the notice of resolution passed must be sent to registrar within ten days from the date of creditor’s meeting.
(f) APPOINTMENT OF LIQUIDATOR
The creditor and the company at their respective meeting may nominate a person to act as liquidator, if different persons are nominated by creditors and company respectively, the opinion of the creditor shall hold good.
(g) COMMITTEE OF INSPECTION
The creditors and the members at their respective meeting may appoint a committee of inspection consisting of five persons in each committee.
(h) LIQUIDATOR’S POWER AND DUTIES
The liquidator may exercise his power for the winding up of the company with the sanction of the committee of inspection or in the absence of such committee, with the creditors.
(i) LIQUIDATOR’S REMUNERATION
The liquidator’s remuneration is fixed by the committee of inspection or, if there is no such committee, by the creditor.
(j) AFTER THE EXPIRY OF ONE YEAR
If winding up continues for more than one year, the liquidator must call the meeting of creditors and members at the end of each year. He must lay before the meeting an account of his acts for the winding up during the preceding year.
(k) AT THE END WINDING UP
On completion of the winding u, the liquidators have to call final general meeting of the members and a meeting of creditors. The notice for these meetings must publish in the gazette and newspaper at least ten days before the meeting. The liquidator has to lay his reports regarding the accounts and assets of the company before the meeting. Within one week after the date of the meeting, the liquidator must submit to registrar a copy of his accounts and return of the holding of such meeting.
(l) DISSOLUTION OF THE COMPANY
At the end of three months from the date of registration of the return the company is dissolved and it ceases its legal entity. Talking to someone and they are not glorifying god, homework tables it is our responsibility to turn the conversation around!