A Detailed Research on Liquidation of a Company
M.Deepthi1, B. Sangeetha Tomer2
1M. Deepthi, BBA.,LLB (HONS) 2nd year , Saveetha Institute Of Medical and Technical Sciences (SIMATS), Saveetha School of Law ,Saveetha University ,Chennai, Tamilnadu, India.
2Sangeetha Tomer, Assistant professor, Saveetha Institute Of Medical and Technical Sciences (SIMATS), Saveetha School of Law ,Saveetha University ,Chennai, Tamilnadu, India.
Manuscript received on November 20, 2019. | Revised Manuscript received on November 28, 2019. | Manuscript published on 30 November, 2019. | PP: 7791-7797 | Volume-8 Issue-4, November 2019. | Retrieval Number: D5387118419/2019©BEIESP | DOI: 10.35940/ijrte.D5387.118419
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: Liquidation is a process of closing the business affairs of a company .It also means closing of all the business activities of a company .In certain circumstances if the company has been involved in illegal business then liquidation is made compulsory. The main reasons for Liquidation of a company is due to insolvency of a company , obsolescence of the products made by the company continuous losses or any other compelling reasons .As per Companies Act , 1956 liquidation of a company can be done in 3 ways , Compulsory liquidation ,Voluntary liquidation and winding up under the supervision of the court . The process of liquidation is done by the appointed liquidator who would look into the interests of the company , its members and its creditors. Compulsory liquidation is usually initiated by the creditors. The essentiality of winding up a company is to save the creditors and members from further losses and also distribution of assets and liabilities among the creditors and members.A company is liquidated when it is ascertained that the business is not in any state to continue. This may be due to various reasons such as insolvency unwillingness to carry on with the operations, etc. An empirical study is done where the samples are collected by using probability sampling and random sampling method. Samples of approximately 1512 respondents are collected . Using the spss tool the value of the chi square is found and the output of the research is that there is no significant association between the process of liquidation of company done by the liquidator and gender and there is a significant association between the compulsory liquidations initiated by the creditors as per court order and its concluded that most of the company undergo liquidation process in order to save the company from loss and also the money which is raised will be distributed to the creditors as well as the shareholders the liquidation process is done only when the business is not in any state to continue.
Keywords: Liquidator , Losses , Business affairs, Insolvency , Creditors.
Scope of the Article: E-Business.