Notice to Contributors, it's proceedings and Saving the interest of the Shareholders.
Section 285 - Settlement of list of contributors and application of assets.
When the Tribunal pass the order of winding up it shall also pass a resolution to settle of the contributors this is done simultaneously, by doing so the decision for assets discharge of liability can be applied thus.
The power lies with Tribunal to make necessary call on to adjust the settlement or adjust the rights of the contributors.
In settling the list of contributors :
The Tribunal shall distinguish between those who are contributors in own right and representatives of, or liable for the debts of, others.
The Tribunal shall take the list of contributors and list the amount to set off. The list shall include both “who is or has been the member”, after scrutinizing, the assets to be dissolved for settling off the amount (costs, charges, expenses of winding up, etc.) shall be adjusted.
- A person who has ceased to be the member for preceding one year or more before the commencement of the winding-up.
- A person who has been a member shall not be liable to contribute towards the company debt or liability after his cessation of membership.
- No past members can be called off for satisfying the contributories, unless the Tribunal orders so, and this shall be done only when the existing members couldn’t settle the same.
- Limited liability Company - In this case the members are only entitle to their unpaid shares which the member is liable for such.
- Limited by Guarantee – The members of this type companies are entitled only to the amount which was guaranteed during the time of winding up.
- Limited by shares – The members shall be entitled to pay the unpaid amount of the shares an nothing more.
To note –
This section is a correspondence to a Section 467 of the Companies Act, 1956. Where the registered members make a call for adjusting the rights of the contributors etc. In the amendment the Tribunal has been given power to settle the list and rights of the contributors.
Rule relating to Contributories final settlement
Rule 104 – final settlement
The appointed official liquidator who gets appointed either by the Tribunal or the board has to list down the contributors and later the same has to brought into the knowledge of other contributors, if neither of the contributors has an issue the list shall be proceeded for final settlement and the same should be submitted by the liquidator to the Tribunal accompanying an affidavit from the contributors for the claim made by them.
The liquidator can add the name to the list of the contributors after verification, those details should be also submitted to the Court with proper evidence for such seeking claim.
Rule 105 – notice for final settlement
The notice shall be sent to the members in the regards of settlement. The above-said process in Rule 104 must be done within 30 days from the date of service of the notice to the contributories and an affidavit shall be submitted by the liquidator or his/her attorney for serving such notice on all person along with the list of contributors.
Notice to Contributory of Final Settlement of list of contributors and that His Name is Included
Take notice that I/we. . . . . . . . . . . . . the Official Liquidator/Liquidators of the above-named Company have by certificate dated the. . . . . . . . . . . . day of. . . . . . . . . 20. . . . under my/our hand/hands, so far settled the list of contributors of the said Company (and that you are included in such list) in the character and for the number of shares (or extent of interest) stated below. The amount due from you in respect of call made prior to liquidation and the uncalled liabilities is also shown therein. Any application by you (to vary the said list of contributors or) that your name may be excluded therefrom must be made by you to the Court, as the case may be, within 30 days from the service on you of this notice, or the same will not be entertained.
The said list may be inspected by you in the said Court on any day between the working hours.
Dated. . . . . . . . . . . day of. . . . . . . . . . . 20 . . . . . . . .
Affidavit of Service of Notice to Contributories of Final Settlement of the List
- I did on the. . . . . . . . . . day of. . . . . . . . 19. . . ., in the manner hereinafter mentioned serve a true of the notice now produced and shown to me and marked „A‟ upon each of the said respective persons whose names, addresses and descriptions appear in the second and third columns of the said first schedule to the list of contributories of the said Company made out by the Official Liquidator of the Company on the. . . . . . . . day of. . . . . . . . . and now on the file of proceedings of the said Company. In the tabular form of the foot of such copies respectively I inserted the number of list, name, address, description, in what character included, number of shares or extent of interest, the amount of calls made prior to liquidation and the amount of uncalled liabilities in respect of the shares (or interest) of the persons on whom such copy of the said notice was served, in the same words and figures as the same particulars are set forth in the said list of contributories.
- I served the said respective copies of the said notice by putting such copies respectively, duly addressed to such persons respectively or their advocates or pleaders or attorneys according to their respective names and addresses appearing in the said list of contributories and with proper postage stamps affixed thereto as registered letters with acknowledgement due into the Post Office at. . . . . . . . on the said. . . . . . . . . . . day of. . . . . . . . . .
THE LIST SUBMITTED BY THE OFFICIAL LIQUIDATOR SHALL BE RECTIFIED BY FILLING UP A FORM.
Any new addition or omission of the name of any member from the list can be done by filing an affidavit in the Tribunal and filing a Form 53.
Summons to Rectify List of Contributories
Let. . . . . . . . . . . . the Official Liquidator of the above-named company, attend at. . . . . . . . on the. . . . . . . . . day of. . . . . . . . 20. . . . ., on the hearing of the application on the part of (name of applicant, etc.), contributory of the abovenamed Company and the Liquidator’s certificate finally settling the same may be varied by excluding the name of the applicant therefrom and that the Liquidator may be ordered to pay to the applicant the costs of this application out of the assets of the Company.
Rule 107 – Endorsement to be made by the Judge
After hearing the objections and for arguments the Court shall finalize the list of contributors and to whom the settlement has to be made. The same shall be endorsed by the Judge (Form 55).
Endorsement by Judge or Settlement of the List of Contributories
List settled as filed by the Official Liquidator (except that Nos. . . . . . . are expunged from the list and Nos. . . . stand over for determination and subsequent endorsement thereon).
Rule 108 – Address for communication
The address of the contributors shall be the same as stated in the list, unless and otherwise been instructed by the Court.
Rule 109 – Open inspection
The members/contributors of the foregoing rule shall be inspected either by the official liquidator or the member appointed by Court.
Every company will maintain a list of contributors, during the time of winding up and after an appointment of an official liquidator, the same has to be processed for their final settlement. This section says about the procedure and supportive rules for listing and notifying the contributors.
This not just safeguards the interest of the contributors but also the interest of the existing shareholders and previous shareholders by providing some checks by not making them liable for settling the contributors.
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