• Yashika Thakran

Section 270 Companies Act 2013. Winding up by the tribunal

Updated: Oct 12

#sec270 #companies #act #2013 #windingup #tribunal #corporatelaw


Section 270

Definition and Meaning

Winding up of a company is the process through which a company’s existence and operations comes to an end. Its property is evaluated at realisable value and distributed to the beneficiaries like its members and creditors.

A Liquidator is appointed to take control of the company who realises its assets, pays all its outstanding demands and finally distributes any surplus remained among the beneficiary members in proportion to their rights.


SECTION 270. MODES OF WINDING UP

Effective from 15th December, 2016

[1] The provisions of Part I shall apply to the winding up of a company by the Tribunal under this Act

Companies (Winding Up) Rules, 2020


Rule 2. Definitions.—In these rules, unless the context or subject matter otherwise requires, –

(a) “Act” means the Companies Act, 2013 (18 of 2013);

(b) “Form” means a Form annexed to these rules;

(c) “Registrar” means the Registrar of the National Company Law Tribunal or National Company Law Appellate Tribunal and includes such other officer of the Tribunal or Bench thereof to whom the powers and functions of the Registrar are assigned;

(d) “Registry” means the Registry of the Tribunal or any of its Benches or of the Appellate Tribunal, as the case may be, which keeps records of the applications and documents relating thereto;

(e) “Section” means section of the Act;

(f) words and expressions used and not defined in these rules but defined in the Act shall have the meanings respectively assigned to them in the Act.


Section 270. Modes of winding up.—

(1) The winding up of a company may be either—

(a) by the Tribunal; or

(b) voluntary.

(2) Notwithstanding anything contained in any other Act, the provisions of this Act with respect to winding up shall apply to the winding up of a company in any of the modes specified under sub-section (1).


Petition for Winding up

Subject to the provisions of Section 272, a petition to the Tribunal for the winding up of a company shall be presented by:

1] The Company;

2] Any creditor or creditors, including any contingent or prospective creditor or creditors;

3] Any contributory and contributories;

4] All or any of the persons specified in clauses (a), (b) and (c) together;

5] The Register;

6] Any person authorised by the Central Government in that behalf.

Powers of Tribunal


The Tribunal may, on receipt of a petition for winding up under section 272 pass any of the following orders, namely:

1] Dismiss it, with or without costs;

2] Make any interim order as it thinks fit;

3] Appoint a provisional liquidator of the company till the making of a winding up order;

4] Make an order for the winding up of the company with or without costs; or

5] Any other order as it thinks fit.

Voluntary Winding up of a company


The company can be wound up voluntarily by the mutual decision of members of the company, if:

1] The company passes a Special Resolution stating about the winding up of the company;

2] The company in its general meeting passes a resolution for winding up as a result of expiry of the period of its duration as fixed by its Articles of Association or at the occurrence of any such event where the articles provide for dissolution of company.


Steps for Voluntary Winding up of a company

The company can be wound up voluntarily by the mutual decision of members of the company, if:

1] Convene a Board Meeting with two Director or by a majority of Directors. Pass a resolution with a declaration by the Directors that they have made an enquiry into the affairs of the Company and that, having done so, they have formed the opinion that the company has no debts or that it will be able to pay its debts in full from the proceeds of the assets sold in voluntary winding up of the company. Also, fix a date, place, time agenda for a General Meeting of the Company after five weeks of this Board Meeting;

2] In the General Meeting, pass the ordinary resolution for winding up of the company by ordinary majority or special resolution by 3/4 majority. The winding up of the company shall commence from the date of passing of this resolution;