Companies (Winding Up) Rules, 2020- Rule 79 & Rule 80

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On January 24, 2020, the Ministry of Corporate Affairs (MCA) notified the Companies (Winding Up) Rules, 2020 (‘Winding Up Rules’), which will be effective from April 1, 2020. While ‘voluntary winding up’ and ‘winding up on the grounds of inability to pay off debts under the Insolvency and Bankruptcy Code, 2016 (‘IBC’).

Registers and Books Of Account to be Maintained by Company Liquidator

Rule 79- Record book to be maintained by Company Liquidator

The Company Liquidator shall maintain a record book for each company in which shall be entered minutes of all the proceedings and resolutions passed at any meeting of the creditors or contributories or of the advisory committee, the substance of all orders passed by the Tribunal in the liquidation proceedings, and all such matters other than matters of account as may be necessary, to furnish a correct view of the administration of the company’s affairs.

According to this rule, the Company Liquidator has to mandatorily maintain each company’s record book which should have all the minutes of the proceedings and the resolutions which have been passed at any meeting of the advisory committee or of creditors and contributories and also have the substance of all the orders passed at the company liquidation process by the Tribunal. It is also required to have the account of other matters as necessary so that there is a proper view of the administration of the company’s affairs.

Rule 80- Registers and books to be maintained by Company Liquidator

(1) The Company Liquidator shall maintain the following books of accounts, so far as may be applicable, in respect of the company under winding up:

(a). Register of Liquidations in Form WIN 38 A;

(b). Central Cash Book in Form WIN 38 B;

(c). Company’s Cash Book in Form WIN 38 C;

(d). General Ledger in Form WIN 38 D;

(e). Cashier’s Cash Book in Form WIN 38 E;

(f). Bank Ledger in Form WIN 38 F;

(g). Register of Assets in Form WIN 38 G;

(h). Securities and Investment Register in Form WIN 38 H;

(i). Register of Book Debts and Outstanding’s in Form WIN 38 -I;

0). Tenants Ledger in Form WIN 38 J;

(k). Suits Register in Form WIN 38 K;

(l). Decree Register in Form WIN 38 L;

(m). Sales Register in Form WIN 38 M;

(n). Register of Claims and Dividends in Form WIN 38 N;

(0). Contributories Ledger in Form WIN 38-O;

(p). Dividends Paid Register in Form WIN 38 P;

(q). Suspense Register in Form WIN 38 Q;

(r). Documents Register in Form WIN 38 R;

(s). Books Register in Form WIN 38 S;

(t). Register of unclaimed dividends and undistributed assets, deposited into the company’s liquidation account in the Bank, in Form WIN 38 T, and in maintaining the registers and books mentioned above, the Company Liquidator shall follow the instructions contained in the respective forms provided for the said books and registers,

(2) The Company Liquidator shall, in addition to the registers and books referred to in sub-rule (1), maintain such other books as may be necessary [or the proper and efficient working of his office such as petty cash register, correspondence register, despatch register, daily register of money orders and cheques received for accounting of transactions entered into by him in relation to the company.

(3) Where the accounts of the company are incomplete, the Company Liquidator shall, with all convenient speed, as soon as the order for winding up is made, have them completed and brought up-to-date.

(4) (a) Where the Company Liquidator is authorised to carry on the business of the company he shall keep separate books of account in respect of such business and such books shall, as far as possible, be in conformity with the books already kept by the company in the course of its business, and the Company Liquidator shall incorporate in the winding up cash book and in the company’s cash book, the total weekly amounts of the receipts and payments on such trading account.

(b) The trading account shall, from time to time not less than once in every month, be verified by affidavit, and the Company Liquidator shall thereupon submit such account to the advisory committee (if any) or such member thereof as may be appointed by the said committee for that purpose, who shall examine and certify the same.

(5) The Company Liquidator shall keep proper vouchers for all payments made or expenses incurred by him, and the vouchers shall be serially numbered.

In Rule 80, sub-rule (1), the Company Liquidator has to maintain the books of accounts whichever is applicable and needed in the process of winding up the company and it also mentions abo different forms which are to be filled.

Sub Rule (2), In addition to the registers and books mentioned in the sub-rule (1), the company liquidator is also supposed to maintain other books wherever necessary such as petty cash register, correspondence register, dispatch register, daily register of money orders and cheques received for accounting of transactions entered into by him in relation to the company.

Sub Rule (3), In case, the accounts of the company are incomplete, the Company Liquidator has to wind up the order as soon as possible and have to complete and update them so that the winding up process can be done on time.

Sub Rule (4) (a), If the Company Liquidator authorized the business of the company to carry on, he is required to keep separate books of account for such business and such books should be in conformity with the company during its time of the business and also the Company Liquidator has to incorporate in the winding up cash book and in the company’s cash book, the total weekly amounts of the receipts and payments on such trading account.

Sub Rule (4) (b), From every time to time and not less than a month, the trading account should be verified by an affidavit, and also the Company Liquidator has to mandatorily submit them to the advisory committee (if there is any) or any such member or anyone appointed by the said committee for that purpose who will be responsible to examine and certify the same.

Sub Rule (5), All the payment vouchers or expenses incurred should be kept by the Company Liquidator and should be mandatorily serial numbered.