COMPARISON BETWEEN COMPANIES ACT, 2013 AND INSOLVENCY AND BANKRUPTCY ACT, 2016 W.R.T. WINDING UP

Abstract

The whole process of putting a legal end of organization is separated into two phases. These two phases are winding up and dissolution. Winding up of organization is characterized as a procedure by which the life of an organization is conveyed to an end and its property directed for advantage of its individuals and banks. It is the last stage, putting a conclusion to life of an organization. The principle motivation behind winding up is to value the existing assets and paying off organization's obligations decently. In this way, winding up is the procedure by which management of an organization's undertakings is removed from its chiefs or in other words, directors, its assets are valued by an authorized officer, i.e., the liquidator and its obligations are released out of the valued assets. So firstly, we need to understand the difference between Winding Up and dissolution: 

• Winding Up is dissolution of company where all the assets are sold off, liabilities are paid off and surplus is distributed and by dissolution, one can understand that it means the company has come to an end. 
• Winding up is a process which happens before the dissolution and dissolution can be considered as the last stage for the ending of a company. 
• A liquidator is appointed for the proceedings of winding up of a company while a liquidator is not needed for the dissolution of a company. 
• If someone wants to wind up the company, then he doesn't need to take orders of the court but for the dissolution of a company court orders are must. 
• When the process of winding up is started then the company doesn't cease to exist and anyone can start proceedings against the company. It's just that now the all the administration part of the company is handled by the liquidator and all the assets still belong to the company. 

In Pierce Leslie & Co. Ltd. V. Violet Ouchterlony the Supreme Court held that winding up goes before the dissolution. There is no statutory arrangement vesting the properties of broke down organization in a trustee or having the impact of repealing. The investors or lenders of a broke up organization can't be viewed as its beneficiaries and successors. On disintegration, its properties, assuming any, vest in the administration.