174 Unit overview

This unit brings you the basic knowledge of prospectus, scheme of arrangement and reconstruction of company. It covers the basic understanding of restraining orders and proceedings against a Company, and the granting of such restraining orders upon approval of scheme of arrangement under Section 176 of the Companies Act 1965. It also discusses the power to stay restrain of proceedings, and the circumstances where the Court can set aside scheme of arrangement under Section 176.

Furthermore, it identifies the source of appointment of receiver in a troubled company. It covers the effect of receiver, the contents in the statement of affairs of the Company to be submitted to receiver, the liquidator. It also highlights circumstances where a liquidator can be disqualified or removed, and ranking of claims in liquidation. It expounds on persons that may apply to the court for winding up of company, grounds for a compulsory winding up, and manner of winding up a company voluntarily. The reality when a company is deemed to be unable to pay its debts, and transaction that falls within the definition of undue preference that can be voidable in a winding up are also discussed.

Subsequently it explains the different duties of receiver and manager. The right of indemnity by a receiver, receivers’ remuneration, fees and disbursements, and the effect of receivership on directors’ powers are also highlighted. Members voluntary winding up and declaration of solvency in a voluntary winding up, creditors voluntary winding up and a meeting of creditors in a creditors voluntary winding up, the powers of liquidator in various modes of winding up, committee of inspection appointed by creditors, and striking off of defunct company under Section 308 of Companies Act 1965 are discussed as well.

Lastly, the various differences of procedures are discussed. The differences between compromise and arrangement under Section 176 of Companies Act 1965 are discussed. The reconstructions and amalgamations under Section 178 of Companies Act 1965, and the differences between receiver and liquidator are highlighted. The differences between the roles of liquidator and provisional liquidator are introduced.

The appointment of receiver by court or out of court, or a privately appointed receiver and the practical procedures in a voluntary winding up are also explained and emphasised.

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