Companies Act Section 275 — Company Liquidators and their appointments
CHAPTER XX WINDING UP
Commercial / Corporate
Summary
Sub-section (1) covers the appointment of a liquidator when the Tribunal orders a company to be wound up. At the time it passes the winding up order, the Tribunal must appoint either an Official Liquidator or a liquidator chosen from a panel maintained under sub-section (2) to act as the Company Liquidator.
Sub-section (2) states that the provisional liquidator or the Company Liquidator, as the case may be, must be appointed by the Tribunal from among insolvency professionals who are registered under the Insolvency and Bankruptcy Code, 2016.
Sub-section (3) deals with a provisional liquidator appointed by the Tribunal. The Tribunal may limit or restrict the provisional liquidator's powers through the order of appointment or through a later order. If no such limits are placed, the provisional liquidator has the same powers as a liquidator.
Sub-section (5) provides that the terms and conditions of appointment, as well as the fee payable to a provisional liquidator or Company Liquidator, will be decided by the Tribunal. These terms and fees are based on the tasks required, the liquidator's experience and qualifications, and the size of the company.
Sub-section (6) requires that upon appointment as provisional liquidator or Company Liquidator, the liquidator must file a declaration with the Tribunal within seven days from the date of appointment. This declaration must be in the prescribed form and must disclose any conflict of interest or lack of independence regarding the appointment. This obligation continues for the entire term of the appointment.
Sub-section (7) says that when passing a winding up order, the Tribunal may appoint a provisional liquidator, if one was appointed under clause (c) of sub-section (1) of section 273, to serve as the Company Liquidator for conducting the winding up proceedings.
Official Text
(1) For the purposes of winding up of a company by the Tribunal, the Tribunal at the time of the passing of the order of winding up, shall appoint an Official Liquidator or a liquidator from the panel maintained under sub-section (2) as the Company Liquidator. 1[
(2) The provisional liquidator or the Company Liquidator, as the case may, shall be appointed by the Tribunal from amongst the insolvency professionals registered under the Insolvency and Bankruptcy Code, 2016 (31 of 2016);]
(3) Where a provisional liquidator is appointed by the Tribunal, the Tribunal may limit and restrict his powers by the order appointing him or it or by a subsequent order, but otherwise he shall have the same powers as a liquidator. 2* * * * *
(5) The terms and conditions of appointment of a provisional liquidator or Company Liquidator and the fee payable to him or it shall be specified by the Tribunal on the basis of task required to be performed, experience, qualification of such liquidator and size of the company.
(6) On appointment as provisional liquidator or Company Liquidator, as the case may be, such liquidator shall file a declaration within seven days from the date of appointment in the prescribed form disclosing conflict of interest or lack of independence in respect of his appointment, if any, with the Tribunal and such obligation shall continue throughout the term of his appointment.
(7) While passing a winding up order, the Tribunal may appoint a provisional liquidator, if any, appointed under clause (c) of sub-section (1) of section 273, as the Company Liquidator for the conduct of the proceedings for the winding up of the company.