Section 283 & 290- The Companies Act, 2013
Updated: May 9
Chapter XX of the Companies Act, 2013 deals with the Winding-up of the company which is the process of ending a company's life and administering its assets for the benefit of its members and creditors is known as winding up. An administrator, known as a liquidator, is appointed to take control of the company, collect its assets, pay its debts, and then distribute any surplus among the members according to their rights.
Custody of company’s properties [Section 283]
The very first responsibility of the company liquidator is to take charge of all the books, accounts, papers, or property of the company. But that does not mean that the company liquidator is the owner, it is deemed to be under the custody of the tribunal via the company liquidator. The company liquidator is a caretaker for the property which is under the custody of the tribunal.
The duty of the liquidator is to take care of the property in his custody.
Property deemed to be in the custody of tribunal from date of winding up order
Tribunal will require a contributory/trusty/receiver/banker/agent/officer/employee to hand over money/paper/books/property of the company within such time as directed to the company liquidator.
On winding up order or appointment of provisional liquidator
Liquidator (company liquidator or provisional liquidator) shall immediately take into his control: a) All the properties, effects, and actionable claims (claim to unsecured debt and beneficial interest in movable property.) b) To which company is entitled and c) Take such steps and measures to protect and preserve the properties of the company.
All the property and effects of the company are deemed to be in the custody of the tribunal from the date of the order of winding up of the company
Tribunal at any time after making a winding-up order a) Require any contributory, trustee, receiver, banker, agent, officer, or other employees of the company b) To pay, deliver, surrender, or transfer of c) Any money, property, books, and papers to which the company appears to be entitled d) Within such time as tribunal directs to the company liquidator.
Powers and duties of Company Liquidator [Section 290]
In the event that a company is wound up by the Tribunal, the Company Liquidator shall have the following powers:
Carry on a business
To do all acts and execute them on the behalf of the company
To sell movable/immovable property
To sell the whole undertaking as a going concern
To raise the required funds
To institute/defend any suit
To invite and settle claims
To inspect the records and returns of the company
To draw/accept negotiable instruments
To obtain professional advice
To take necessary actions for: a) Winding-up b) Distribution of assets c) Discharge of his duties and obligations.