CONSEQUENCES OF WINDING UP :

The following are the consequences of winding up:

1. An officer called a liquidator is appointed & he takes over the administration of the company. He may be appointed by High Court, members or by the creditors as the case may be.

2. The powers of the board of directors will cease & will now vest the liquidator.

3. Winding up order or resolution of voluntary winding up shall operate as a notice of discharge to all the members of the company. Members of company are called ‘Contributories’.

4. Liquidator of the company will prepare a list of contributories who be made liable to contribute to the assets of the company in case assets are not sufficient to meet the claims of various claimants. In case there is a surplus in the assets, the liquidator of the company will prepare a list of those members, who are entitled to share this surplus.

5. Liquidator of the company will collect & realise its assets & distribute the proceeds among right claimants as per the procedure of the law.

6. Winding up ultimately leads to dissolution of the company. The company’s life will come to an end & it will be no more an artificial person in the eyes of law.