Companies (Winding Up) Rules, 2020- Rules 91-99
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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’).
Filing and Audit of Company Liquidator’s Accounts
Rule 91- Half-yearly accounts to be filed
For the purposes of sub-section (2) of section 294, unless otherwise ordered by the Tribunal, the Company Liquidator shall file his accounts to Tribunal twice a year and such accounts shall be made up to the 31st of March and 30th of September every year, the account for the period ending 31 st March being filed not later than the 30th of June following, and account for the period ending 30th September, not later than the 31st of December following:
Provided that the final accounts of the Company Liquidator shall be filed as soon as the affairs of the company have been fully wound up, irrespective of the period specified above:
Provided further that the Tribunal may permit the Company Liquidator to straight away forward completed accounts of the company in liquidation in respect of relevant period to the auditor for the purpose of audit in Form WIN 42 requesting that the accounts may be audited, and the certificate of audit shall be submitted to the Tribunal not later than one month from the date of receipt of the copy of the accounts as required under subsection (3) of section 294:
Provided also that the accounts need not be got audited where the transaction during the period is for ten thousand rupees or less.
Rule 91 read with Section 294 sub section (2) unless ordered by the Tribunal, the Company Liquidator has to file his accounts twice i.e., 31st of March and 30th of September to the tribunal and also the account for the period ending 31st March should not be filed later than the 30th June whereas the account for the period ending 30th September should not be filed later than 31st December.
Also, the final accounts of the Company Liquidator have to be filed as soon as the affairs of the company have been fully winded up, irrespective of the period specified in this rule.
The tribunal can permit the Company Liquidator to forward the completed accounts of the company liquidation process to the auditor so that he can audit the same in Form WIN 43 and request that the accounts may be audited and also the certificate of audit has to be submitted to the tribunal not later than a month from the date of receipt of the copy of the accounts as required under subsection (3) of this section.
Rule 92- Form of Account
The account shall be a statement of receipts and payments in Form WIN 39 and shall be prepared in accordance with the instructions contained in the said form and three copies thereof shall be filed, and the account shall be verified by an affidavit of the Company Liquidator in Form WIN 40 and the final account shall be in Form WIN 41.
The account has to be a statement of receipts and payments and has to be filled and prepared as per the instructions given in Form WIN 39 and also three copies have to be filed and the account has to be verified by an affidavit of the Company Liquidator in Form WIN 40 and final account should be filed in Form WIN 41.
Rule 93- Nil Account
Where the Company Liquidator has not, during the period of account, received or paid any sum of money on account of the assets of the company, he shall file an affidavit of no receipts or payments on the date on which he shall have to file his accounts for the period.
If the Company Liquidator has not received or paid any sum of money on account of the assets of the company during the period of account, he has to file an affidavit of no receipts or payments on the date he was supposed to file his accounts for the period.
Rule 94- Registry to send copy of account to auditor
As soon as the accounts are filed, the Registry shall forward to the auditor one copy thereof for purposes of audit with a requisition in Form WIN 42 requesting that the accounts may be audited and a certificate of audit be submitted to the Tribunal not later than one month from the date of receipt of the copy of the account as required under sub‐section (3) of section 294:
Provided that the accounts need not be got audited where the total transaction during the period is for ten thousand rupees or less.
The registry has to mandatorily forward one copy of the accounts as soon as they are filed to the auditor with a request filled in Form WIN 42, requesting that the accounts may be audited and the same certificate of audit to be submitted to the Tribunal not later than one month from the date of receipt of the copy of the account as required under subsection (3) of this section. Also, the accounts need not be audited if the total transaction is less than Rs 10000 or less.
Rule 95- Audit of Company Liquidator’s Accounts
The accounts shall be preferably audited by one or more Chartered Accountants appointed by the Tribunal from out of the panel to be maintained by the Tribunal, the audit shall be a complete check of the accounts of the Company Liquidator and the Company Liquidator shall produce before the auditor all his books and vouchers for the purposes of the audit, and shall give the auditor all such explanations, information and assistance as may be required of him in respect of the accounts.
One or more Chartered Accountants to be appointed by the Tribunal in order to get the accounts audited and completely check the accounts of the Company Liquidator, where he is supposed to produce all his books and vouchers before the auditor and explain, give information, and offer assistance wherever required in respect of his accounts.
Rule 96- Audit Certificate to be Filed
After the audit of the accounts of the Company Liquidator filed in Tribunal, the auditor shall forward to the Registry a certificate of audit relating to the account with his observations and comments, if any, on the account, together with a copy thereof and shall forward another copy to the Company Liquidator, and the Company Liquidator shall file copy of the audit certificate together with a copy of audited accounts with the Registrar of Companies and the Registry shall file the original audit certificate with the records of the Tribunal.
When the Company Liquidator accounts have been audited and the same has been filed in the Tribunal, the auditor has to forward a certificate of audit related to the account with comments and observations together with a copy to the Registry and the same should be forwarded to the Company Liquidator. Also, the Company Liquidator has to file a copy of the audit certificate with a copy of audited accounts with the Registrar of Companies and the Registry has to file the original audit certificate with the records of the Tribunal.
Rule 97- Audit Fees
The audit fees shall be fixed by the Tribunal from time to time having regard to -the nature and complexity of the case.
As per the nature and complexity of the case, the Tribunal has to fix the audit fees from time to time accordingly.
Rule 98- Inspection of Account and Certificate of Audit
Any creditor or contributory shall be entitled to inspect the accounts and the auditor’s certificate in the office of the Tribunal on payment of fees of one hundred rupees and to obtain a copy thereof on payment of the charges at the rate of five rupees per page.
Any contributory or creditor will be entitled to inspect the accounts and certificate of auditor in the Tribunal Office with the payment of Rs 100 and in order to obtain a copy of the same, there are charges of Rs 5 per page.
Rule 99- Account and auditor’s report to be placed before Tribunal
Upon the audit of the account, the Registry shall place the statement of account and the auditor’s certificate before the Tribunal for its consideration and orders.
After the audit of the account, the Registry is supposed to place the statement of account and the certificate of the audit before the Tribunal for its orders and consideration.