Page 184 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 9: Fundamentals of Liquidation of Companies

(a) All revenues, taxes, cases and rated, whether payable to the government or local authority notes
at the relevant date and having become due and payable within twelve months next before
the commencement of winding up;
(b) All wages or salaries (including wages payable for time or piece work and salary earned
wholly or in part by way of commission) of any employee, in respect of services rendered
to the company and due for the period not exceeding four months within the next twelve
months before the winding up, any compensation payable to any workman under any
of the provision of Chapter VA of the Industrial Disputes Act, 1947 provided that the
amount payable to each employee or workman will not exceed ` 1000. [As per notification
G.S.R. 80(E) dated 17-02-1997, the sum payable to any one claimant in relation to wages
and salary shall not exceed ` 20,000];

(c) All accrued holiday remuneration becoming payable to any employee on account of
winding up;
(Where a person advances money for the payment of employee’s wages or salary and
holiday remuneration stated above, (b) and (c ) will be treated as preferential creditors);
(d) Unless the company is being wound up voluntarily only for the purpose of reconstruction
or amalgamation with another company, all contributions payable during the next twelve
months before the winding up, by the company as the employer of any person, under the
Employees’ State Insurance Act, 1948 or any other law for the time being in force;
(e) Unless the company is being wound up voluntarily merely for the purpose of reconstruction
or of amalgamation with another company, or unless it has taken out a workmen’s
compensation insurance policy, all compensation due under the Workmen’s Compensation
Act, 1923;

(f) All sums due to any employee from a provident fund, a pension fund, a gratuity fund or
any other fund for the welfare of the employees, maintained by the company;
(g) The expenses of any investigation held under Section 235 or Section 237 insofar as they are
payable by the company.

self assessment

Fill in the blanks:
6. List ‘B’ includes all the past members who ceased to be members (except by death) within
................. of the winding up of the company.
7. The court may order the ................. to first pay off the debt due by him to the company and
then claim the amount due to him.

9.4 relevant Date

The expression relevant date means:
(i) In case of a compulsory winding up, the date of appointment of a provisional liquidator,
or if no such appointment was made, date of winding up order unless in either case, the
company had commenced to be wound up voluntarily;
(ii) In any other case, date of passing of the resolution for the voluntary winding up of the
company.

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