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Welcome

Welcome. Yashwantrao Chavan Mahavidhylay, Tuljapur,. Presented by--- Mr. Ekdante Nilesh Gunwant. Department of Commerce. Subject : Corporate Accounting. B. Com. 2 nd Year. Topic : Liquidation of Joint Stock Company. Liquidation of Joint Stock Company. Introduction :

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Welcome

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  1. Welcome

  2. Yashwantrao Chavan Mahavidhylay, Tuljapur, Presented by--- Mr. Ekdante Nilesh Gunwant Department of Commerce Subject: Corporate Accounting B. Com. 2nd Year Topic : Liquidation of Joint Stock Company

  3. Liquidation of Joint Stock Company • Introduction: Joint Stock company is an artificial person, which is created by law. There is a legal procedure for the formation of a joint stock company. Similarly there is legal procedure for closing down it. If the directors of joint stock company desire to dissolve the company, they cannot do so in any manner they choose. They can dissolve the company only through the process laid down by law.

  4. Meaning and Definition • “ The realization of the assets, the discharge of its liabilities and the distribution of surplus among its shareholders with a view to bring about its dissolution, is known as winding up.” • “ The legal process through which a joint stock company is wound up, is called Liquidation.”

  5. Methods of Winding up 1) Compulsory Winding Up by Court. 2) Voluntary Winding up : a) Member’s Voluntary Winding up. b)Creditor’s Voluntary Winding up.

  6. Liquidation Process Company Law of 1956 has laid down a detailed procedure, according to which Only Company should be liquidated. When voluntary liquidation is proposed, a Special resolution for voluntary winding up of the company is passed in the General Meeting of the company. After passing such resolution, Liquidator of the company is appointed, and his remuneration is fixed.

  7. Liquidator : The Liquidator’s duty is to pay the debts of the Company and adjust the rights of the contributories amongst them selves. In the case of a voluntary liquidation, the liquidator has to make up an account of Liquidation showing how the winding up has been conducted, what amounts were realized from the properties and assets of the company, and how such realisation ware distributed. He has to present such a statement before a General Meeting of the Shareholders. The statement will take the form of a Receipts and Payments Account(Liquidator’s Statement of Account)

  8. Liquidator’s Statement of Account When the amount available is insufficient to pay unsecured creditors or contributories, the remuneration shall calculated as fallows. • Amount Available X Rate Remuneration = 100 + Rate

  9. Illustration 1: The Goa Ltd. went into liquidation on 31st Mar, 2014. The liabilities of the company were as fallows: The cash balance with the company was Rs 2500. liquidation expenses was Rs.400. The Liquidator’s remuneration was fixed at 3% on the amount realized. Prepare the Liquidator’s final statement of Account

  10. Solution

  11. Thank You….

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