Page 356 - DMGT407Corporate and Business Laws

Unit 14: Winding up and Dissolution of a Company

Preferential Payments: In the event of winding up, certain payments are to rank in priority to Notes
others, they are called preferential payments.
Special Resolution: A resolution is a special resolution when the number of votes cast in favour
of the resolution is three times the number cast against it.

14.8 Review Questions

1. Elucidate the circumstances in which a company may be wound up by the Company Law
Board.
2. “There is no difference between winding up and dissolution”. Do you agree? Comment.
3. Analyse the powers and discretion of the court in case of winding up of the company.
4. If you have to wind up your company voluntarily, what procedure will you follow for the
same?
5. Examine the liability of members of a company in the event of its being wound up.
6. Your friend wants to wind up his company due to frequent loss he is suffering in his
business. He is very confused. He wanted your advice on the winding up procedure. What
suggestion you will give to him?
7. Define the term ‘contributory.’ Discuss the liability of members of a company in the event
of its being wound up.
8. State the liabilities of contributories as present and past members.
9. Explain – “The liability of contributory is ex lege and not ex contractu”.
10. What are the circumstances in which a company may be wound up on the ground that it is
just and equitable to wind it up?

Answers: Self Assessment

1. Contributory 2. contract of membership
3. legal representatives 4. special
5. insolvent 6. Central Government
7. preferential 8. termination
9. Workmen’s 10. liquidator
11. void. 12. official liquidator
13. defunct 14. 2
15. 30

14.9 Further Reading

Book S.S. Gulshan, Business Law, Excel Books, New Delhi, 2006.

Online links www.legalserviceindia.com/article/details.asp?id=62
www.secp.gov.pk/SECGuideSeries/pdf/Guide_WindingUp.pdf

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