Page 179 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II Anand Thakur, Lovely Professional University

notes unit 9: fundamentals of liquidation of companies

contents

Objectives
Introduction
9.1 Concept of Liquidation
9.2 Types of Liquidation
9.2.1 Compulsory Winding up
9.2.2 Voluntary Winding up

9.2.3 Winding up Subject to Supervision of Court
9.3 Important Terms
9.4 Relevant Date
9.5 Statement of Affairs and Deficiency/Surplus Account

9.5.1 Summary of Gross Assets and Gross Liabilities
9.5.2 List ‘H’ Deficiency/Surplus Account
9.5.3 Procedure to Prepare Statement of Affairs
9.6 Summary
9.7 Keywords

9.8 Review Questions
9.9 Further Readings

objectives

After studying this unit, you will be able to:

l z Define the concept of liquidation
l z Describe the types of liquidation
l z Explain few important terms related to liquidation
l z Interpret Statement of Affairs and Deficiency/Surplus Account

introduction

Business organisations are formed by people. Sole trading business organisations are formed
by a single person, while other forms of business organisations are formed by group of people.
Sole trading and partnership business organisations are comparatively easier to start than the
company form of organisations. Companies are creation of law, viz., Companies Act, 1956.
Statutory provisions are there to form a company. In the same way, for liquidation or winding
up of a company, there are certain provisions in the Act. In this unit we will discuss the meaning
of liquidation, modes of winding up of a company, appointment of liquidator, meaning of
contributories and preferential payments.

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