Winding up is the process of putting

an end to the life of the company.

It is the proceeding by which a company
is dissolved.
In the course of such dissolution, the
assets of the company are disposed of,
the debts are paid-off out of the realised
assets and the surplus if any.
A company may be winding up in any one
of the three ways,
1. *Compulsory Winding-up by the Court;
or
2. Voluntary Winding-up. This may be:
i) Members voluntary winding-up, or
ii) Creditors voluntary winding-up.
3. Winding-up subject to the supervision
of the Court.
 METHODS
OF
WINDING-UP

3. Winding-up
1. Compulsory
2. Voluntary Subject To
Winding-up
Winding-up The Supervision
By The Court
Of The Court

Members Voluntary Creditors Voluntary

Winding-up Winding-up
1. COMPULSORY WINDING-UP
BY THE COURT

Compulsory winding-up or by the

Court, is the winding-up of a company
by the legal orders of the Court or
which is compulsory.
1. *Compulsory Winding-up By
The Court [Section 433]
1. Special Resolution
2. Default in Filling Statutory Report or
Holding Statutory Meeting
3. Failure To Commence Business Within Time
4. Reduction Of Membership
In the case of a public company, below 7
In the case or a private company, below 2
5. Inability To Pay Debts
6. Default In Filling P/L Account and B/S
7. Acted Against The Sovereignty & Integrity of India
8. Sick Industrial Company
9. Just & Equitable
* Loss of objective
* Deadlock management
2. VOLUNTARY WINDING-UP
Voluntary Winding-up means winding-up by the
members or creditors of the company
themselves without the intervention of the
Court.
Section 484 of the Companies Act 1956, provides
that a company can be wound up voluntarily under
the following circumstances:-
1. Ordinary Resolution: The members passed in a
general meeting in the following cases:
A. Where the duration of the company was fixed by
Articles of Association and the period has expired;
and
B. Where the Articles of Association provided for
winding-up on the occurrence of any event and that
event has occurred.
2. Special Resolution: Within 14 days of
passing the resolution for voluntary winding-
up, it must be notified to the public by an
advertisement in the Official Gazette and in
local newspapers.
 2. Voluntary Winding-up
Section [482-521]
TYPES OF VOLUNTARY WINDING-UP
Voluntary
Winding-up

Members Voluntary Creditors Voluntary

Winding-up Winding-up

1. Members Voluntary Winding-up:

Winding-up A winding-up in the
case of which a declaration has been made by the BOARD and
filled with the Registrar is referred to as member voluntary
winding-up.
2. Creditors Voluntary Winding-up:
Winding-up If the declaration of the
solvency has not been made by the Board Of Directors, the
winding-up is referred to as creditors voluntary winding-up.
3. WINDING-UP UNDER THE
SUPERVISION OF THE COURT
At any time after a company has passed a
special resolution for voluntary winding-up,
the Court may make an order that the
voluntary winding-up shall continue, but
subject to the Court supervision, and on the
terms and conditions specified by the Court.
Such an order is passed by the Court where
(i) the resolution for winding up was obtained by fraud, or
(ii) the rules relating to the winding up order have not
been observed, or
(iii) the liquidator is prejudicial or is negligent in collecting
the assets.

The Court is also empowered under the section 527 to

make an order for compulsory winding up superseding
the order of winding up under its supervision.
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