CHAPTER XXI
PART I.— Companies Authorised to Register under this Act
366. (1) For the purposes of this Part, the word “company” includes any partnership
firm, limited liability partnership, cooperative society, society or any other business entity
formed under any other law for the time being in force which applies for registration under
this Part.
(2) With the exceptions and subject to the provisions contained in this section, any
company formed, whether before or after the commencement of this Act, in pursuance of any
Act of Parliament other than this Act or of any other law for the time being in force or being
otherwise duly constituted according to law, and consisting of seven or more members, may
at any time register under this Act as an unlimited company, or as a company limited by
shares, or as a company limited by guarantee, in such manner as may be prescribed and the
registration shall not be invalid by reason only that it has taken place with a view to the
company’s being wound up:
Provided that—
(i) a company registered under the Indian Companies Act, 1882 or under the
Indian Companies Act, 1913 or the Companies Act, 1956, shall not register in pursuance
of this section;
(ii) a company having the liability of its members limited by any Act of Parliament
other than this Act or by any other law for the time being in force, shall not register in
pursuance of this section as an unlimited company or as a company limited by
guarantee;
(iii) a company shall be registered in pursuance of this section as a company
limited by shares only if it has a permanent paid-up or nominal share capital of fixed
amount divided into shares, also of fixed amount, or held and transferable as stock, or
divided and held partly in the one way and partly in the other, and formed on the
principle of having for its members the holders of those shares or that stock, and no
other persons;
(iv) a company shall not register in pursuance of this section without the assent
of a majority of such of its members as are present in person, or where proxies are
allowed, by proxy, at a general meeting summoned for the purpose;
(v) where a company not having the liability of its members limited by any Act of
Parliament or any other law for the time being in force is about to register as a limited
company, the majority required to assent as aforesaid shall consist of not less than
three-fourths of the members present in person, or where proxies are allowed, by proxy,
at the meeting;
Order of
dissolution of
company.
Companies
capable of
being
registered.
6 of 1882.
1 of 1956.
7 of 1913.
(vi) where a company is about to register as a company limited by guarantee, the
assent to its being so registered shall be accompanied by a resolution declaring that each
member undertakes to contribute to the assets of the company, in the event of its being
wound up while he is a member, or within one year after he ceases to be a member, for
payment of the debts and liabilities of the company or of such debts and liabilities as may
have been contracted before he ceases to be a member, and of the costs, charges and
expenses of winding up, and for the adjustment of the rights of the contributories among
themselves, such amount as may be required, not exceeding a specified amount.
(3) In computing any majority required for the purposes of sub-section (1), when a poll
is demanded, regard shall be had to the number of votes to which each member is entitled
according to the regulations of the company.
367. On compliance with the requirements of this Chapter with respect to registration,
and on payment of such fees, if any, as are payable under section 403, the Registrar shall
certify under his hand that the company applying for registration is incorporated as a company
under this Act, and in the case of a limited company that it is limited and thereupon the
company shall be so incorporated.
368. All property, movable and immovable (including actionable claims), belonging to
or vested in a company at the date of its registration in pursuance of this Part, shall, on such
registration, pass to and vest in the company as incorporated under this Act for all the estate
and interest of the company therein.
369. The registration of a company in pursuance of this Part shall not affect its rights
or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to,
with, or on behalf of, the company before registration.
370. All suits and other legal proceedings taken by or against the company, or any
public officer or member thereof, which are pending at the time of the registration of a
company in pursuance of this Part, may be continued in the same manner as if the registration
had not taken place:
Provided that execution shall not issue against the property or persons of any individual
member of the company on any decree or order obtained in any such suit or proceeding; but,
in the event of the property of the company being insufficient to satisfy the decree or order,
an order may be obtained for winding up the company.
371. (1) When a company is registered in pursuance of this Part, sub-sections (2) to
(7) shall apply.
(2) All provisions contained in any Act of Parliament or any other law for the time being
in force, or other instrument constituting or regulating the company, including, in the case of
a company registered as a company limited by guarantee, the resolution declaring the amount
of the guarantee, shall be deemed to be conditions and regulations of the company, in the
same manner and with the same incidents as if so much thereof as would, if the company had
been formed under this Act, have been required to be inserted in the memorandum, were
contained in a registered memorandum, and the residue thereof were contained in registered
articles.
(3) All the provisions of this Act shall apply to the company and the members,
contributories and creditors thereof, in the same manner in all respects as if it had been
formed under this Act, subject as follows:—
(a) Table F in Schedule I shall not apply unless and except in so far as it is
adopted by special resolution;
(b) the provisions of this Act relating to the numbering of shares shall not apply
to any company whose shares are not numbered;
Certificate of
registration of
existing
companies.
Vesting of
property on
registration.
Saving of
existing
liabilities.
Continuation
of pending
legal
proceedings.
Effect of
registration
under this
Part.
(c) in the event of the company being wound up, every person shall be a contributory,
in respect of the debts and liabilities of the company contracted before registration, who is
liable to pay or contribute to the payment of any debt or liability of the company contracted
before registration, or to pay or contribute to the payment of any sum for the adjustment of
the rights of the members among themselves in respect of any such debt or liability, or to
pay or contribute to the payment of the costs, charges and expenses of winding up the
company, so far as relates to such debts or liabilities as aforesaid;
(d) in the event of the company being wound up, every contributory shall be
liable to contribute to the assets of the company, in the course of the winding up, all
sums due from him in respect of any such liability as aforesaid; and in the event of the
death or insolvency of any contributory, the provisions of this Act with respect to the
legal representatives of deceased contributories, or with respect to the assignees of
insolvent contributories, as the case may be, shall apply.
(4) The provisions of this Act with respect to—
(a) the registration of an unlimited company as a limited company;
(b) the powers of an unlimited company on registration as a limited company, to
increase the nominal amount of its share capital and to provide that a portion of its
share capital shall not be capable of being called-up except in the event of winding up;
(c) the power of a limited company to determine that a portion of its share capital
shall not be capable of being called-up except in the event of winding up,
shall apply, notwithstanding anything in any Act of Parliament or any other law for the time
being in force, or other instrument constituting or regulating the company.
(5) Nothing in this section shall authorise the company to alter any such provisions
contained in any instrument constituting or regulating the company as would, if the company
had originally been formed under this Act, have been required to be contained in the
memorandum and are not authorised to be altered by this Act.
(6) None of the provisions of this Act (apart from those of section 242) shall derogate
from any power of altering its constitution or regulations which may be vested in the company,
by virtue of any Act of Parliament or any other law for the time being in force, or other
instrument constituting or regulating the company.
(7) In this section, the expression “instrument” includes deed of settlement, deed of
partnership, or limited liability partnership.
372. The provisions of this Act with respect to staying and restraining suits and other
legal proceedings against a company at any time after the presentation of a petition for
winding up and before the making of a winding up order, shall, in the case of a company
registered in pursuance of this Part, where the application to stay or restrain is by a creditor,
extend to suits and other legal proceedings against any contributory of the company.
373. Where an order has been made for winding up, or a provisional liquidator has
been appointed for, a company registered in pursuance of this Part, no suit or other legal
proceeding shall be proceeded with or commenced against the company or any contributory
of the company in respect of any debt of the company, except by leave of the Tribunal and
except on such terms as the Tribunal may impose.
374. Every company which is seeking registration under this Part shall,—
(a) ensure that secured creditors of the company, prior to its registration under
this Part, have either consented to or have given their no objection to company's
registration under this Part;
(b) publish in a newspaper, advertisement one in English and one in vernacular
language in such form as may be prescribed giving notice about registration under this
Part, seeking objections and address them suitably;
Power of
Court to stay
or restrain
proceedings.
Suits stayed
on winding up
order.
Obligations
of companies
registering
under this
Part.
(c) file an affidavit, duly notarised, from all the members or partners to provide
that in the event of registration under this Part, necessary documents or papers shall
be submitted to the registering or other authority with which the company was earlier
registered, for its dissolution as partnership firm, limited liability partnership, cooperative
society, society or any other business entity, as the case may be.
(d) comply with such other conditions as may be prescribed.
PART II.—Winding up of unregistered companies
375. (1) Subject to the provisions of this Part, any unregistered company may be
wound up under this Act, in such manner as may be prescribed, and all the provisions of this
Act, with respect to winding up shall apply to an unregistered company, with the exceptions
and additions mentioned in sub-sections (2) to (4).
(2) No unregistered company shall be wound up under this Act voluntarily.
(3) An unregistered company may be wound up under the following circumstances,
namely:—
(a) if the company is dissolved, or has ceased to carry on business, or is carrying
on business only for the purpose of winding up its affairs;
(b) if the company is unable to pay its debts;
(c) if the Tribunal is of opinion that it is just and equitable that the company
should be wound up.
(4) An unregistered company shall, for the purposes of this Act, be deemed to be
unable to pay its debts—
(a) if a creditor, by assignment or otherwise, to whom the company is indebted in
a sum exceeding one lakh rupees then due, has served on the company, by leaving at
its principal place of business, or by delivering to the secretary, or some director,
manager or principal officer of the company, or by otherwise serving in such manner as
the Tribunal may approve or direct, a demand under his hand requiring the company to
pay the sum so due, and the company has, for three weeks after the service of the
demand, neglected to pay the sum or to secure or compound for it to the satisfaction
of the creditor;
(b) if any suit or other legal proceeding has been instituted against any member for
any debt or demand due, or claimed to be due, from the company, or from him in his
character as a member, and notice in writing of the institution of the suit or other legal
proceeding having been served on the company by leaving the same at its principal
place of business or by delivering it to the secretary, or some director, manager or
principal officer of the company or by otherwise serving the same in such manner as the
Tribunal may approve or direct, the company has not, within ten days after service of the
notice,—
(i) paid, secured or compounded for the debt or demand;
(ii) procured the suit or other legal proceeding to be stayed; or
(iii) indemnified the defendant to his satisfaction against the suit or other
legal proceeding, and against all costs, damages and expenses to be incurred by
him by reason of the same;
Winding up
of
unregistered
companies.
(c) if execution or other process issued on a decree or order of any Court or
Tribunal in favour of a creditor against the company, or any member thereof as such, or
any person authorised to be sued as nominal defendant on behalf of the company, is
returned unsatisfied in whole or in part;
(d) if it is otherwise proved to the satisfaction of the Tribunal that the company
is unable to pay its debts.
Explanation.—For the purposes of this Part, the expression "unregistered company"—
(a) shall not include—
(i) a railway company incorporated under any Act of Parliament or other
Indian law or any Act of Parliament of the United Kingdom;
(ii) a company registered under this Act; or
(iii) a company registered under any previous companies law and not
being a company the registered office whereof was in Burma, Aden, Pakistan
immediately before the separation of that country from India; and
(b) save as aforesaid, shall include any partnership firm, limited liability partnership
or society or co-operative society, association or company consisting of more than
seven members at the time when the petition for winding up the partnership firm, limited
liability partnership or society or co-operative society, association or company, as the
case may be, is presented before the Tribunal.
376. Where a body corporate incorporated outside India which has been carrying on
business in India, ceases to carry on business in India, it may be wound up as an unregistered
company under this Part, notwithstanding that the body corporate has been dissolved or
otherwise ceased to exist as such under or by virtue of the laws of the country under which
it was incorporated.
377. (1) The provisions of this Part, with respect to unregistered companies shall be in
addition to and not in derogation of, any provisions hereinbefore in this Act contained with
respect to the winding up of companies by the Tribunal.
(2) The Tribunal or Official Liquidator may exercise any powers or do any act in the
case of unregistered companies which might be exercised or done by the Tribunal or Official
Liquidator in winding up of companies formed and registered under this Act:
Provided that an unregistered company shall not, except in the event of its being wound
up, be deemed to be a company under this Act, and then only to the extent provided by this Part.
378. Nothing in this Part, shall affect the operation of any enactment which provides
for any partnership firm, limited liability partnership or society or co-operative society,
association or company being wound up, or being wound up as a company or as an
unregistered company, under the Companies Act, 1956, or any Act repealed by that Act:
Provided that references in any such enactment to any provision contained in the
Companies Act, 1956 or in any Act repealed by that Act shall be read as references to the
corresponding provision, if any, contained in this Act.
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