Winding up also has an immediate human impact. Under Section 277(3), a winding-up order is deemed to operate as notice of discharge to the officers, employees and workmen of the company, except where the business of the company is continued. The financial consequences must then be properly determined. Relevant amounts may include: unpaid wages and… Continue reading Employees & Workmen: What Happens When the Winding-Up Order Is Passed?
Pending litigation can materially affect the winding-up process. The company may be involved in: civil suits; arbitration; recovery proceedings; tax litigation; labour disputes; regulatory proceedings; or proceedings in which the company itself is seeking recovery of money. Under Section 279, once a winding-up order has been passed or a provisional liquidator has been appointed, a… Continue reading Pending Litigation: What Happens to Cases After a Winding-Up Order?
If Part 3 asks: “Who does the company owe?” Part 4 asks: “What does the company own?” A company undergoing winding up may still have: old receivables; security deposits; electricity or lease deposits; income-tax/GST refunds; investments; shares in subsidiaries; trademarks and patents; domain names; software or other intellectual property; immovable property; loans and advances; insurance… Continue reading Hidden & Forgotten Assets: Finding Everything the Company Owns
Creditors are central to the winding-up process. A company’s books may show ₹10 lakh payable to a vendor, but: the vendor claims ₹15 lakh; the creditor cannot be traced; invoices are unavailable; the company disputes the liability; the balance has remained outstanding for many years; the liability is contingent; or a creditor submits a claim… Continue reading The Creditor Challenge: What Happens to Outstanding Claims?
Even where a valid ground for winding up exists, the company’s affairs should be carefully reviewed before entering the winding-up process. Think of this as a pre-winding-up health check. The review should identify: creditors and outstanding loans; statutory and tax dues; ROC filing defaults and penalties; bank accounts and balances; trade receivables; fixed assets… Continue reading Before the Petition: Is the Company Ready for Winding Up?
Section 10 of the Insolvency and Bankruptcy Code, 2016 enables a corporate debtor that has committed a default to initiate the Corporate Insolvency Resolution Process (“CIRP”) before the NCLT through a corporate applicant. Its primary objective is to provide an opportunity for resolution and revival of the corporate debtor, rather than its immediate liquidation.… Continue reading Section 10 – IBC, 2016 & Section 271 – Companies Act, 2013
Winding up under the Companies Act, 2013 is not simply an alternative method for closing any company that has stopped business. Under Sections 270 and 271 of the Companies Act, 2013, a company may be wound up by the Tribunal only on the grounds specifically recognized by law. These include where: the company has… Continue reading When Can a Company Be Wound Up by the NCLT?
The successful closure of an Indian company, wherein the client engaged us to strategically plan and seamlessly execute the business closure process. Given that the Company was solvent, the objective was to facilitate an orderly exit while enabling the recovery of surplus funds. Following extensive deliberations and a comprehensive evaluation of the available exit… Continue reading Beyond Closure: Delivering Compliance, Efficiency and Stakeholder Value
The successful closure of the subsidiary of a UK based parent company, wherein the client engaged us to strategically plan and seamlessly execute the business closure process. Given that the Company was solvent, the objective was to facilitate an orderly exit while enabling the recovery of surplus funds. Following extensive deliberations and a comprehensive… Continue reading Facilitating a Smooth and Compliant Exit for a UK-Owned Indian Subsidiary
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