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(a) if the company has, by special resolution, resolved that the company be
wound up by the Tribunal;
(b) if the company has acted against the interests of the sovereignty and in-
tegrity of India, the security of the State, friendly relations with foreign States,
public order, decency or morality;
(c) if on an application made by the Registrar or any other person authorised by
the Central Government by notification under this Act, the Tribunal is of the
opinion that the affairs of the company have been conducted in a fraudulent
manner or the company was formed for fraudulent and unlawful purpose or the
persons concerned in the formation or management of its affairs have been
guilty of fraud, misfeasance or misconduct in connection therewith and that it is
proper that the company be wound up;
(d) if the company has made a default in filing with the Registrar its financial
statement or annual returns for immediately preceding five consecutive finan-
cial year ; or
(e) if the Tribunal is of the opinion that it is just and equitable that the company
should be wound up.
Petition for winding up:
(1) According Section 272 of Companies Act 2013 the following parties can
present the petition to the Tribunal for winding up (Effective from 15-12-2016):
(a) the company;
(b) any contributory or contributories;
(c) all or any of the persons specified in clauses (a) and (b);
(d) the Registrar ;
(e) any person authorised by the Central Government in that behalf; or
(f) in a case falling under clause (b) of section 271, by the Central Government
or a State Government.
(2) A contributory shall be entitled to present a petition for the winding up of a
company, notwithstanding that he may be the holder of fully paid-up shares , or
that the company may have no assets at all or may have no surplus assets left
for distribution among the shareholders after the satisfaction of its liabilities,
and shares in respect of which he is a contributory or some of them were either
originally allotted to him or have been held by him, and registered in his name,
for at least six months during the eighteen months immediately before the
commencement of the winding up or have devolved on him through the death
of a former holder.
(3) The Registrar shall be entitled to present a petition for winding up under
section 271, except on the grounds specified in clause (a) of that section:
Provided that the Registrar shall obtain the previous sanction of the Central
Government to the presentation of a petition:
Provided further that the Central Government shall not accord its sanction un-
less the company has been given a reasonable opportunity of making represen-
tations.
(4) A petition presented by the company for winding up before the Tribunal
shall be admitted only if accompanied by a statement of affairs in such form
and in such manner as may be prescribed.
(5) A copy of the petition made under this section shall also be filed with the
Registrar and the Registrar shall, without prejudice to any other provisions,
submit his views to the Tribunal within sixty days of receipt of such petition.
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Provisions of Companies Act 2013 on Liquidation and Insolvency & Bank-
ruptcy Code (IBC) 2016 :
The Companies Act, 2013 Chapter– XX Part III- provides important pro-
visions applicable to every mode of winding up
Section 326: Overriding preferential payments.
According to section 326 of Companies Act 2013:
(1) In the winding up of a company under this Act, the following debts shall be
paid in priority to all other debts:
(a) workmen’s dues; and
(b) where a secured creditor has realised a secured asset, so much of the debts
due to such secured creditor as could not be realised by him or the amount of
the workmen’s portion in his security (if payable under the law), whichever is
less, pari passu with the workmen’s dues:
Provided that in case of the winding up of a company, the sums referred to in
sub-clauses (i) and (ii) of clause (b) of the Explanation, which are payable for a
period of two years preceding the winding up order or such other period as may
be prescribed, shall be paid in priority to all other debts (including debts due to
secured creditors), within a period of thirty days of sale of assets and shall be
subject to such charge over the security of secured creditors as may be pre-
scribed.
(2) The debts payable under the proviso to sub-section (1) shall be paid in full
before any payment is made to secured creditors and thereafter debts payable
under that sub-section shall be paid in full, unless the assets are insufficient to
meet them, in which case they shall abate in equal proportions.
Explanation.—For the purposes of this section, and section 327—
(a) “workmen”, in relation to a company, means the employees of the compa-
ny, being workmen within the meaning of clause (s) of section 2 of the Industri-
al Disputes Act, 1947 (14 of 1947);
(b) “workmen’s dues’‘, in relation to a company, means the aggregate of the
following sums due from the company to its workmen, namely:—
(i) all wages or salary including wages payable for time or piece work and
salary earned wholly or in part by way of commission of any workman in re-
spect of services rendered to the company and any compensation payable to any
workman under any of the provisions of the Industrial Disputes Act, 1947 (14
of 1947);
(ii) all accrued holiday remuneration becoming payable to any workman or, in
the case of his death, to any other person in his right on the termination of his
employment before or by the effect of the winding up order or resolution;
(iii) unless the company is being wound up voluntarily merely for the purposes
of reconstruction or amalgamation with another company or unless the compa-
ny has, at the commencement of the winding up, under such a contract with in-
surers as is mentioned in section 14 of the Workmen’s Compensation Act, 1923
(19 of 1923), rights capable of being transferred to and vested in the workmen,
all amount due in respect of any compensation or liability for compensation un-
der the said Act in respect of the death or disablement of any workman of the
company;
(iv) all sums due to any workman from the provident fund, the pension fund,
the gratuity fund or any other fund for the welfare of the workmen, maintained
by the company;
(c) “workmen’s portion”, in relation to the security of any secured creditor of
a company, means the amount which bears to the value of the security the same
proportion as the amount of the workmen’s dues bears to the aggregate of the
amount of workmen’s dues and the amount of the debts due to the secured cred-
itors.
Illustration 1
The value of the security of a secured creditor of a company is Rs. 1,00,000.
The total amount of the workmen’s dues is Rs. 1,00,000. The amount of the
debts due from the company to its secured creditors is Rs.3,00,000. The aggre-
gate of the amount of workmen’s dues and the amount of debts due to secured
creditors is Rs. 4,00,000. The workmen’s portion of the security is, therefore,
one-fourth of the value of the security, that is Rs. 25,000.
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Section 327: Preferential payments or Creditors:
Preferential payments or creditors are those unsecured creditors,
who, on account of the special provisions in the companies act have
priority of payment over the other unsecured creditors. As per section
327 the following items are considered preferential payments or credi-
tors.
(a) all revenues, taxes, cesses and rates due from the company to the
Central Government or a State Government or to a local authority at the
relevant date, and having become due and payable within the twelve
months immediately before that date;
(b) all wages or salary including wages payable for time or piece work
and salary earned wholly or in part by way of commission of any em-
ployee in respect of services rendered to the company and due for a pe-
riod not exceeding four months within the twelve months immediately
before the relevant date, subject to the condition that the amount
payable under this clause to any workman shall not exceed such amount
as may be notified;
(c) all accrued holiday remuneration becoming payable to any employ-
ee, or in the case of his death, to any other person claiming under him,
on the termination of his employment before, or by the winding up or-
der, or, as the case may be, the dissolution of the company;
(d) unless the company is being wound up voluntarily merely for the
purposes of reconstruction or amalgamation with another company, all
amount due in respect of contributions payable during the period of
twelve months immediately before the relevant date by the company as
the employer of persons under the Employees’ State Insurance Act,
1948 or any other law for the time being in force;
(e) unless the company has, at the commencement of winding up, under
such a contract with any insurer as is mentioned in section 14 of the
Workmen’s Compensation Act, 1923, rights capable of being transferred
to and vested in the workmen, all amount due in respect of any com-
pensation or liability for compensation under the said Act in respect of
the death or disablement of any employee of the company:
Provided that where any compensation under the said Act is a weekly
payment,  the amount payable under this clause shall be taken to be the
amount of the lump sum for which such weekly payment could, if re-
deemable, be redeemed, if the employer has made an application under
that Act;
(f) all sums due to any employee from the provident fund, the pension
fund, the gratuity fund or any other fund for the welfare of the employ-
ees, maintained by the company; and
(g) the expenses of any investigation held in pursuance of
sections 213 and 216, in so far as they are payable by the company.

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Procedure for voluntary winding up:
According to Insolvency and Bankruptcy Code (IBC) 2016, the following
are the steps for initiating a voluntary winding up of a Company:
Step 1: Board Meeting:
Convene a Board Meeting with two Directors or by a majority of Direc-
tors. Pass a resolution with a declaration by the Directors that they have made
an enquiry into the affairs of the Company and that, having done so, they have
formed the opinion that the company has no debts or that it will be able to pay
its debts in full from the proceeds of the assets sold in voluntary winding up of
the company. Also, fix a date, place, and time agenda for a General Meeting of
the Company after five weeks of this Board Meeting.
Step 2: General Meeting:
Issue notices in writing calling for the General Meeting of the Company
proposing the resolutions, with suitable explanatory statement.
Step 3: Ordinary resolution:
In the General Meeting, pass the ordinary resolution for winding up of the
company by ordinary majority or special resolution by 3/4 majority. The wind-
ing up of the company shall commence from the date of passing of this resolu-
tion.
Step 4: Meeting of the Creditors:
On the same day or the next day of passing of resolution of winding up of
the Company, conduct a meeting of the Creditors. If two thirds in value of cred-
itors of the company are of the opinion that it is in the interest of all parties to
wind up the company, then the company can be wound up voluntarily. If the
company cannot meet all its liabilities on winding up, then the Company must
be wound up by a Tribunal.
Step 5: Appointment of liquidator:
Within 10 days of passing of resolution for winding up of company, file a
notice with the Registrar for appointment of liquidator.
Step 6: Official Gazette and Advertisement:
Within 14 days of passing of resolution for winding up of company, give
a notice of the resolution in the Official Gazette and also advertise in a newspa-
per with circulation in the district where the registered office is present.
Step 7: Certified copies of the ordinary or special resolution:
Within 30 days of General Meeting for winding up of company, file certi-
fied copies of the ordinary or special resolution passed in the General Meeting
for winding up of the company.
Step 8: Liquidators Account:
Wind up affairs of the company and prepare the liquidators account of the
winding up of the company and get the same audited.
Step 9: Final General Meeting :
Call for final General Meeting of the Company.
Step 10: Disposal of the Books and Papers:
Pass a special resolution for disposal of the books and papers of the com-
pany when the affairs of the company are completely wound up and it is about
to be dissolved.
Step 11: Application to the Tribunal:
Within two weeks of final General Meeting of the Company, file a copy
of the accounts and file an application to the Tribunal for passing an order for
dissolution of the company.
Step 12: Order for Dissolution:
If the Tribunal is satisfied, the Tribunal shall pass an order dissolving the
company within 60 days of receiving the application.
Step 13: File a copy of the order with the Registrar:
The company liquidator would then file a copy of the order with the Reg-
istrar.
Step 14: Notice in the Official Gazette:
The Registrar, on receiving the copy of the order passed by the Tribunal
then publishes a notice in the Official Gazette that the company is dissolved.
Close what is draining you and get rid of the shackles. It is only when you get
rid of the clutter in your life, you start growing!