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Accounts Presentation

The presentation discusses the process of liquidation of companies, which involves winding up the company's affairs, selling assets, paying liabilities, and distributing any surplus to stakeholders. It outlines the roles of a liquidator, the modes of winding up (compulsory, voluntary, and under court supervision), and the order of payments during liquidation. The conclusion emphasizes the importance of adhering to legal and accounting principles for transparency and fairness in the liquidation process.

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15 views11 pages

Accounts Presentation

The presentation discusses the process of liquidation of companies, which involves winding up the company's affairs, selling assets, paying liabilities, and distributing any surplus to stakeholders. It outlines the roles of a liquidator, the modes of winding up (compulsory, voluntary, and under court supervision), and the order of payments during liquidation. The conclusion emphasizes the importance of adhering to legal and accounting principles for transparency and fairness in the liquidation process.

Uploaded by

gaugaikwad2775
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
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Corporate Accounting

Presentation on:

Accounting For Liquidation


of Companies

Presented By:

Name: Gauri.V.Gaikwad
Class: SY B.com
Div: B
Roll No. : 152
Subject: Corporate Accounting- II
(Sem-IV)
INTRODUCTION
• A Company is an artificial person and it is created by law therefore
the law alone can close it.
• Liquidation of company refers to process in which a company’s
existence is brought to an end. On liquidation the affairs of a
company are wound up and its name is struck off from the Register
of the Registrar of Companies and this fact is published in the
Official Gazette.
• Definition
• The existence of a company can be terminated by means of winding
up. The process of which by company is dissolved known as winding
up of a company.
• The winding up of a company is a proceedings which the co business
is closed down sell off it’s assets and the creditors are paid, the
balance of asset are distributed to the members.
MEANING OF
LIQUIDATION
• Liquidation or winding up is a legal process
through which a company ceases to exist. Since
a company is a legal entity, it cannot dissolve
naturally and must be wound up by law. A
liquidator is appointed to manage its assets,
settle debts, and distribute any surplus among
members as per their rights. Once all formalities
under the Companies Ordinance are completed,
the company is dissolved.
WHO IS LIQUIDATOR?

• A liquidator is a person appointed to oversee the


winding-up process of a company. Their role
includes taking control of the company’s assets,
settling its debts, and distributing any remaining
funds among shareholders. The liquidator ensures
the company is properly dissolved as per legal
requirements.
PROCESS OF
WINDING-UP :
1. Selling of the assets of the company
2. Paying off the liabilities of the company
3. If there is any deficiency to pay to the creditors and the
shareholders are called upon to pay unpaid amount on their
articles.
4. In case of surplus, after paying off the liabilities, it may be
distributed to the contributories according to their rights under
the articles.
5. At the end, the Registrar of Companies removes the name of
the company from the Register of Companies which is maintained
by his office.
MODES OF WINDING-UP

Modes of winding- up

Winding-up under the


Compulsory winding-
Voluntary Winding-up supervision of the
up
court

Member’s Creditors
voluntary voluntary
Winding-up Winding-up
MODES OF WINDING-UP

1) COMPULSORY WINDING-UP BY THE COURT


2) A company formed and registered under the ordinance, may be wound up by the court. This kind of winding
up is also called compulsory winding up.
3) Explanations:
4) 1) A company needs to pass a special resolution and also court orders for winding up on the basis of some
specific grounds
5) 2) When company is unable to pay its debts
3) If company is carrying any illegal business
4) When the statutory meaning is not conducted then the Court may give orders to wind up the company
5) In case of non submission of Statutory Report to the Registrar
6) if company unable to start its business within a year after incorporation
7) If company is not having minimum number of members In case of public: minimum 7 members In case of
private: minimum 2 members
8) If company doesn’t follow the directions of the court or registrar or commission etc.
2) VOLUNTARY WINDING-UP BY MEMBERS OR CREDITORS:

The main object of a voluntary winding is that the company and its creditors shall
be left to settle their affairs without going to Court, but they may apply to the
court for any directions and order if and when necessary. Explanations:

A) When the period fixed for the duration of the company has expired.
B) If the company passes the special resolution of its winding up by voluntary.
C) When the event occurs and the articles provide information that when this
event will occur then company has to be wound up.
3) WINDING-UP UNDER THE SUPERVISION OF THE COURT:

When company has passed special or extra-ordinary resolution for its


liquidation or winding up, court can pass an order on application of
creditors, contributors or other persons for conducting of liquidation or
winding up of company under supervision of court

ORDER OF PAYMENTS:
I) Legal Charges
II) Remuneration to the liquidator
III) Cost of winding-up
IV) Preferential creditors
V) Debenture holders or other creditors
VI) Unsecured creditors
VII) Preferential shareholders
VIII)Equity shareholders
Liquidators final statement of accounts
CONCLUSION
• In conclusion, accounting for the liquidation
of companies involves systematically settling
liabilities, realizing assets, and distributing
remaining funds to stakeholders. The process
follows legal and accounting principles,
ensuring creditors are paid in order of
priority before distributing any surplus to
shareholders. Proper documentation and
compliance with regulatory requirements are
crucial for transparency and fairness in
liquidation proceedings.

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