In addition, there are two types of voluntary liquidation – if the declaration of solvency turns out to be incorrect, several consequences ensue. As soon as the liquidator is of the opinion that the declaration is false, he is obliged to call a meeting of creditors. At the meeting, creditors have the right to appoint another person as liquidator; And regardless of whether they do so or not, the liquidation will then take place as a voluntary liquidation of creditors. Second, directors who make the declaration are guilty of a criminal offence unless they can prove that they had reasonable grounds to do so. The liquidation of a business is not the same as bankruptcy, although it is usually an end result of bankruptcy. Bankruptcy is a court case in which creditors try to access a company`s assets so that they can be liquidated to pay off their debts. Although there are different types of bankruptcies, the procedure can help a company become a new debt-free and usually smaller entity. The Tribunal shall grant each party 30 days from receipt of the application to file a statement of objections against such an application for liquidation. It is attached to the list of operations of the company. The judicial management gives the company some time to reorganize its affairs and try to restructure the company, its operations and its debts. It is intended to enable the company to restructure, to continue at least part of its business activities or to realise a more advantageous realisation of the company`s assets than would be the case in the event of liquidation. It is also useful if it is likely to lead to the approval of a composition plan between the company and its creditors.

(b) Ranking of unsecured claims Section 203(1) of the IRDA determines the ranking of senior claims payable in relation to all other unsecured claims in the following order: (a) the costs and expenses of winding up the trustee of record; (b) the fees and costs of liquidation, including the remuneration of the trustee; (c) the costs incurred by the applicant for the winding-up order; (d) wages or salaries up to a prescribed limit; (e) reductions up to a prescribed limit; (f) workers` compensation under the Workers` Compensation Act, Chapter 354; (g) amounts due in respect of contributions to the pension fund; (h) vacation pay; (i) Taxes. (a) General section 125 of the IRPA sets out a number of grounds on which the court may make a winding-up order. The creditor often states that “the company is unable to pay its debts”. Under the provisions of the Companies Act 2013, compulsory liquidation is only possible in the following circumstances: The provisions of the Companies Act 2013 also define the actions that the court would take once the application for liquidation of the company had been received. In the event of the liquidation of a company, the following steps are followed – The court has the power to make one of the following orders upon receipt of the application for liquidation of a company – The court order is often triggered by an action brought by the company`s creditors. They are often the first to realize that a business is insolvent because their bills are unpaid. In other cases, liquidation is the final conclusion of insolvency proceedings in which creditors may attempt to recover amounts owed by the company. In any case, a company may not have enough assets to fully satisfy all its debtors and creditors will suffer an economic loss. If a resolution is made on the dissolution of a corporation within the corporation, the court may order the continuation of the voluntary liquidation. The liquidation procedure differs depending on the registration status of the company, i.e.

whether the company is registered or whether it is an unregistered company. Voluntary liquidation will be initiated immediately after the adoption of the above-mentioned decision. At the annual general meeting, the liquidator must give a brief account of his actions and the affairs he deals with as well as the progress of the liquidation before all the other shareholders of the company. A person must owe a minimum amount of INR 750 without dispute before he can apply for liquidation. The court decides at the hearing on the application whether it should allow or be dismissed. If the application is accepted, the liquidation of the company is ordered. The winding-up shall be deemed to have commenced at the time of the application for winding-up. There are important procedural and substantive differences between the two forms of settlement. First, in the case of voluntary liquidation of a creditor, a meeting of creditors must be convened on the same day as the meeting of the company or the following day. This meeting is not required for the voluntary dissolution of a member.

Second, when a member is voluntarily dissolved, the members are in charge, for example, they can appoint the liquidator. Creditors, on the other hand, have control over the voluntary liquidation of a creditor. They appoint the liquidator and the members of the inspection committee. The insolvency practitioner informs creditors and conducts discussions with the company`s management on the context of liquidation. Conversely, once the liquidation process has begun, a company cannot continue as usual. The only measure they can try is to complete the liquidation and distribution of their assets. At the end of the process, the company is dissolved and ceases to exist. Under Article 124(1) of the IRDA, the creditor is entitled, inter alia, to lodge an application for liquidation. Voluntary liquidation of creditors is a procedure in which the directors of the company decide to voluntarily terminate the business by appointing a liquidator (who must be a licensed insolvency practitioner) to liquidate all assets. The main provisions of the voluntary liquidation of creditors are: holding a general meeting of the company to present the report to the company and giving a specific explanation of the justification for the steps taken to succeed in the liquidation of the company.

If creditors so wish, they can set up a control committee to oversee the entire process of liquidating the company. Liquidation is the process of dissolving a business. During liquidation, a business ceases to operate as usual. Its sole purpose is to sell shares, pay off creditors and distribute the remaining assets to partners or shareholders. The term is mainly used in the UK, where it is synonymous with liquidation, where assets are converted into cash. Generally speaking, there are two types of liquidation of the company: An application for liquidation must be filed at the same time as the application for liquidation by the following companies – The vast majority of applications for liquidation are made by creditors who want to enforce the payment of uncontested claims. However, a creditor whose debt is contested by the company for objective reasons should not file an application for liquidation of the company, as the company would be terminated.