Scribd
Upload
13 views7 pages

Importance of Liquidator in Winding Up of Companies

Uploaded by

prez5567
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
13 views7 pages

Importance of Liquidator in Winding Up of Companies

Uploaded by

prez5567
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 7

IMPORTANCE OF LIQUIDATOR IN WINDING UP

OF COMPANIES

PRESENTED BY –
PRESHIT PAWAR
A049
BBA-LLB
INTRODUCTION

 Under Indian Law, the “death” of a firm has been compared to the death of a person. A liquidator is appointed in
the liquidation of a company to take possession of and dispose of all of the firm's assets in the same manner as a
man forms a will and transfers his property.
 The roles of directors and workers then dissolve. The liquidator will be given all of the records and documents.
 When a company accumulates a large amount of debt to the point that it is no longer viable to continue operations,
a major threat emerges, and the process of winding up becomes unavoidable, requiring the debts, obligations, and
surplus, if any, to be paid. The liquidator's function becomes increasingly important in this regard.
 Further Discussed – Why Voluntary Winding up? ; Appointment; Powers and Duties; Importance; Insolvency and
Bankruptcy Code, 2016.
COMPANY LIQUIDATOR
 According to Section 2(94A) of The Companies Act, 2013, Winding up can be defined as, “winding up under this
act or liquidation in Insolvency and Bankruptcy Code”
 In general sense, liquidator is a person who conducts the whole process of liquidation. When a company is about
to wind up it is required to realize the assets of the company and it should be distributed among the “debenture
holders”, “creditors” “shareholders” etc.
 For this purpose a person is appointed who does all the required things before the company “cease to exist”. This
person is called Liquidator under Company Law.
 There's two types of winding up -

Compulsory Voluntary
Winding Up Winding Up
PROVISIONS FOR LIQUIDATOR UNDER COMPANIES ACT FOR
VOLUNTARY WINDING UP

 Under Companies Act 2013, Chapter XX is “WINDING UP”, which is divided into three parts, with Part II, from
Sections 304-323 containing provisions for Voluntary Winding Up. The third Part, Part III – deals with provisions
applicable to both modes of winding up.
 310 for Appointment.
 Section 311 provides for the power to remove and fill the vacancy of a company liquidator and 312 makes it
mandatory for a notice to be given to the Registrar regarding the appointment of the liquidator.
 IMP Section 313 – Case of Rangai Goundan.
 Can Liquidators be considered as defendant in suits against the company? – No. Case Law – Dawsons Banks Ltd.
[AIR 1935 SC 79].
 “It is essential to mention that a liquidator acts in the name of the company and not in his own name”
POWERS AND DUTIES

Section 314 titled as, “Powers and Duties of Company Liquidator in Voluntary winding up” lists functions and duties
which the liquidator has to discharge in line with as determined by the company or the creditors. “

Collecting and
Hold Meeting for
Distributing Obeying Order of
Creditors and
Company Court
Contributories
Property

Appointment Maintain
Maintaining
of Inspection Paper Books Accounts
Committee

Investigate
Affairs of
Company
KEY DIFFERENCES – VOLUNTARY WINDING UP

COMPANIES ACT, 2013 Insolvency and Bankruptcy Code, 2016


• Insolvency Professional
• Official Liquidator
• Governing Sections -59 read with Insolvency
• Governing Sections – 304-323 and Bankruptcy Board of India (Voluntary
Liquidation Process) Regulation, 2017.

Other changes incorporated too.


CONCLUSION
 The Liquidator is responsible to the Company's creditors and stockholders. The Liquidator has a fiduciary
responsibility with the Company and its creditors. The major goal of choosing a Liquidator is to have a
professional person executing the winding up of a company, so as to smoothen up the process and make it efficient
and in accordance to the law. It is important to note that a liquidator, in case of a suit filed against the company,
cannot be held as a party to suit.
 A liquidator, of course, is there to bring about the liquidation. Between the corporation and its debtors, there is
harmony and balance. He must act in the best interests of all parties involved in respect to the company.
 The Process of Voluntary Winding up of solvent company is now shifted from the Companies Act, 2013 to
Insolvency and Bankruptcy Code of 2016. The liquidator under this section is referred to as the Insolvency
professional. Part II of Chapter XX, Companies Act, 2013. has been repealed.
 In the end, to conclude, be it an Insolvency Professional or a Company Liquidator, both play an important role in
the winding up of companies and contribute to make sure there are no discrepancies or malpractices during the
process and a company can rest in peace in a fair and just manner.

You might also like