Provisions applicable to every voluntary winding-up:
These provisions are contained in Sections 510 to 521. These are summarised below:
(a) As regards the distribution, on realisation of the assets of the company in liquidation, such assets should be applied subject to the provisions of the Act, as to preferential payment in satisfaction of its liabilities pari passu and the residue will be distributed among the members according to their rights and interests in the company (Section 511). For the purpose the liquidator has to ascertain the assets and liabilities of the company and draw-up a scheme of distribution.
(b) The liquidator in all cases is entitled to be supplied with a statement as to the affairs of the company verified by an affidavit containing the particulars relating, inter alia, to:
(i) the assets of the company stating separately the balance in hand and at banks, and the negotiable securities held by the company.
(ii) its debts and liabilities;
(iii) names, residence and occupations of all creditors and amounts standing to their credit together with dates and amounts of securities given therefor; and
(iv) debts due to the company and the amount likely to be realized on their accounts.
The liquidator can compel one or more directors or other officer of the company to submit such a statement within 21 days from the date of the commencement of the winding -up. He may also extend the time up to a maximum period of 3 months from that date (Section 511A read with Section 454).
(c) A body corporate cannot be appointed as a liquidator (Section 513).
(d) If for any reason whatever there is no liquidator to act, the Court may appoint the Official
Liquidator or any other person as a liquidator and appoint in his stead the official Liquidator. The Registrar is also empowered to apply to the Court for such appointment or removal so that the liquidation proceedings be accelerated and the proper conduct of the liquidation by a competent liquidator be ensured (Section 515).
(e) Within 30 days of his appointment, the liquidator is required to publish his appointment, in the Official Gazette and notify the same in the prescribed form to the Registrar (Section-516).
(f) Section 518 empowers the liquidator or any contributory or creditor to apply to the Court to have questions determined or to exercise the powers as specified in the Section.
(g) Section 519 empowers the liquidator to apply to the Court for public examination of promoters, directors, etc. on the detection of a fraud having been committed by them.
(h) All costs charges and expenses properly incurred in the winding-up are required to be paid, subject to the rights of secured creditors, out of the assets of company in priority to all other claims (Section 520).