MCA notifies Winding up Rules, 2020

MCA vide its notification dated 24^th day of January 2020 published Companies (Winding-Up) Rules, 2020 laying down procedures for winding up by the Tribunal under Part I of Chapter XX of the Companies Act, 2013 which will be effective from 1^st  day of April 2020. With the enforcement of these rules, the chapter XX is applicable to the below class of companies:

1. Companies having a book value of not more than INR 10,000,000 (Indian Rupees One crore) and which has taken a deposit and total outstanding deposits is not exceeding INR 2,500,000 (Indian Rupees Twenty Five lakh); or
2. Companies having a book value of not more than INR 10,000,000 (Indian Rupees One crore) and which has total outstanding loan including secured loan of note more than INR 5,000,000 (Indian Rupees Fifty lakh); or
3. Companies having a book value of not more than INR 10,000,000 (Indian Rupees One crore) and which has turnover up to INR 500,000,000 (Indian Rupees fifty crore); or
4. Companies having a book value of not more than INR 10,000,000 (Indian Rupees One crore) and which has paid-up share capital not more than INR 10,000,000 (Indian Rupees one crore).

The Companies (Winding-Up) Rules, 2020 provides rules for filing of petition by (i) the Company; (ii) any contributory or contributories; (iii) the Registrar; (iv) any person authorized by the Central Government in that behalf;  and (v) Central or State Government in case the Company has acted against the interests of the sovereignty and integrity of India, the security of the state, friendly relations with foreign states, public order, decency or morality on matters including but not limited to the following:

1. Winding up by Tribunal;
2. Appointment of Provisional Liquidators;
3. Appointment of official/ Company Liquidator;
4. Winding-up Order;
5. Application for stay of suits etc. on winding up order;
6. Report by Company Liquidator under section 281;
7. Settlement of list of contributors;
8. Advisory Committee;
9. Meetings of Creditors and Contributories;
10. Proxies in relation to meetings of creditors and contributories;
11. Registration and Books of Account to be maintained by Company Liquidators;
12. Banking Account of Company Liquidator;
13. Investment of Surplus Funds;
14. Filing and Audit of Company Liquidator’s Account;
15. Collection and Distribution of Assets in Winding up by Tribunal;
16. Examination of directors and promoters;
17. Summon of persons suspected of having property of company, etc.;
18. Application against Delinquent Directors, Promoters and Officers of the Company;
19. Compromise or Abandonment of Claims;
20. Sale by Company Liquidator;
21. Dividends and Returns of Capital in Winding up by Tribunal;
22. Termination of Winding-up;
23. Payment of Unclaimed Dividends or Distribution of Assets and Summary Procedure for Liquidation.

The text of the Companies (Winding-up) Rules, 2020 can be viewed at below link: http://www.mca.gov.in/Ministry/pdf/Rules_28012020.pdf   Last Updated: 31^st January 2020 This article is contributed by:  Luv Malhotra Senior Manager, Legal

Tag: Company Act, Company Law, MCA