Modes of Types of Winding up
The companies Act provides for three types of winding up. They are: 1. Compulsory winding up or winding up by an order of the court. 2. Voluntary winding up. Voluntary Winding up may be sub -divided into: 1. Member's Voluntary winding up (i.e., winding up on the initiative and under the supervision of members) 2. Creditor's Voluntary winding up (i.e., winding up on the initiative and under the supervision of the creditors of the company). 3. Winding up under the supervision of the court. COMPULSORY WINDING UP OR WINDING UP BY THE COURT Compulsory winding up of a company is brought about by an order of the court. 1. If the company, of its own accord, passes a special resolution that it should be wound up by the court, and presents a petition to the court for the winding up. 2. If the company makes a default in filling the statutory report with the registrar of companies or in holding the statutory meeting within the pre-scribe time 3. If the company does not commence business within one year from the date of its incorporation or suspends its business for a whole year 4. If the number of members falls below seven in the case of a public company, and below two in the case of a private company. 5. If the company is unable to pay its debts 6. If the court is of the opinion that it is just and equitable that the company be wound up.
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