{"id":276,"date":"2021-02-08T06:09:16","date_gmt":"2021-02-08T00:39:16","guid":{"rendered":""},"modified":"2026-09-03T16:46:32","modified_gmt":"2026-09-03T16:46:32","slug":"termination-of-a-company-by-a-court","status":"publish","type":"post","link":"https:\/\/www.legalsalaah.com\/blog\/termination-of-a-company-by-a-court\/","title":{"rendered":"Termination of a company by a court"},"content":{"rendered":"<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">A Company never dies a natural death it is always dissolved. Today in this blog we are going to explain about winding of a company by a court and what to do after the termination of the company, function of the liquidator.<\/span><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><span style=\"font-size:16.0pt\">What is the liquidation of the company?<\/span><\/strong><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The liquidation of the company is a process through which the life of the company ends and the assets of the company are managed for the benefit of its members and creditors. A liquidator is appointed an administrator and takes control of the company, collects its assets, pays its debts, and finally distributes any surplus among the members according to their rights.<\/span><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><span style=\"font-size:16.0pt\">Who can apply for the winding up of the company?<\/span><\/strong><\/span><\/span><\/span><\/div>\n<ul>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Company<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li value=\"5\">\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Director<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li value=\"5\">\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Share payer<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li value=\"5\">\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Creditor<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li value=\"5\">\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Central and state government<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li value=\"5\">\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">ROC and Tribunal<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<\/ul>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><span style=\"font-size:16.0pt\">How does the company wind up by court?<\/span><\/strong><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"color:#e74c3c\"><span style=\"font-family:Georgia,serif\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The company can be closed by the court as follows.<\/span><\/span><\/span><\/span><\/div>\n<ul>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">When it is written in the company&#39;s memorandum that the company will be closed by the court.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the 3\/4 directors of the company are ready for winding up by the court.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the company&#39;s members fall below the minimum limit. Or else get away from the maximum limit.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the company does not do its business for 1 year after the company is incorporated and the court feels that the company will not be able to start the business quickly.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the company does not send its record ROC on time or it is found deficient.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">When the tribunal feels that the company has been formed for cheating, etc., its completion is necessary.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">When the company is unable to repay the debt and the court finds that the assets of the company are not sufficient to pay the creditor.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">When the Court feels that the winding up of the company is justified.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<\/ul>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><span style=\"font-size:16.0pt\">What to do after the Termination of the company?<\/span><\/strong><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">After the termination and dissolution of the <strong><a href=\"https:\/\/www.legalsalaah.com\/company-registration-in-india.html\">company registration in India<\/a><\/strong> the company holder should follow the steps:<\/span><\/span><\/span><\/span><\/div>\n<ul>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">First of all, a board meeting will be held in which it will be explained how the closing will be done and details of accounts and necessary instructions will be made in it.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The company will elect a liquidator who will look at the accounts of the company.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">How much salary or commission the liquidator will get will be decided in the House.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The liquidator shall report this to ROC within 10 days of closing.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">After the liquidator is elected, the powers of directors and CEO, etc. will end.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The company should be closed independently if anyone finds it wrong then it can go to court.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the closing takes more than 1 year, then the liquidator will hold a board meeting and give all the information and account details related to the closing and will also send it to ROC from time to time.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<\/ul>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><span style=\"font-size:16.0pt\">What are the Functions of a liquidator?<\/span><\/strong><\/span><\/span><\/span><\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\">&nbsp;<\/div>\n<div style=\"margin-left:0cm; margin-right:0cm\"><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><strong><u><span style=\"font-size:16.0pt\">Functions of a Liquidator:<\/span><\/u><\/strong><\/span><\/span><\/span><\/div>\n<ul>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">After the closing of the company, a meeting of all the people will be called in which the liquidator will give all the information related to the account, in which it will also be clarified how much the property was sold, how many creditors were there, and how much is left.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">This meeting will be called by advertisement in which time, place, time, etc. will be written in advance.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If everyone feels that the closing of the company is not justified, then the government order or tribunal will disband it.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">All reports must be filed to roc within 7 days of completion.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the termination work is not done in the public interest, then the court will investigate it.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the court finds that the director is not capable of doing this, then the liquidator gives the details to the roc.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">The dissolution of the company may occur after the closing of the company.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">If the company is liquidated by any method, then the payment of the obligations will be as follows.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Staff arrears first<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Outstanding creditors<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">4-month salary of employees<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Central government and state government dues<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<li>\n<div><span style=\"font-family:Georgia,serif\"><span style=\"color:#000000\"><span style=\"font-size:11pt\"><span style=\"font-size:16.0pt\">Also, when the assets are not paid in full, and then pay in proportion to the creditors.<\/span><\/span><\/span><\/span><\/div>\n<\/li>\n<\/ul>\n<div style=\"margin-left:36pt; margin-right:0cm\">&nbsp;<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Termination\/winding up\/liquidation of a company by the court is the second way of termination of a company registration which applies when a company does not fulfill the law under the company act.<\/p>\n","protected":false},"author":1,"featured_media":568,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-276","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-mca"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Termination of a company by a court<\/title>\n<meta name=\"robots\" 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