Section 275 of CA 2013 : Section 275: Company Liquidators And Their Appointments

Explanation using Example

Imagine a scenario where ABC Pvt. Ltd. is facing severe financial difficulties and creditors have filed a petition for its winding up due to the company's inability to pay its debts. The National Company Law Tribunal (NCLT), after hearing the case, decides that the company should be wound up.

Under Section 275 of the Companies Act, 2013, the NCLT, at the time of passing the winding up order, appoints Mr. X, an insolvency professional registered under the Insolvency and Bankruptcy Code, as the Company Liquidator to manage the winding up process of ABC Pvt. Ltd.

Mr. X's powers are defined by the NCLT, and he is tasked with taking control of the company's assets, settling debts with creditors, and distributing any remaining assets to the shareholders according to the provisions of the Act.

The NCLT also sets the terms and fees for Mr. X's appointment, considering the size of ABC Pvt. Ltd. and the complexity of the winding up process. Mr. X is required to submit a declaration to the NCLT stating that there is no conflict of interest or lack of independence in his appointment.