Section 357 of the Companies Act, 2013

Section 357 of the Companies Act, 2013 deals with:

Commencement of Winding Up by Tribunal

Bare Act Summary of Section 357:

When a company is being wound up by the Tribunal, the winding up is deemed to have commenced:

From the date of presentation of the petition for winding up — not from the date of the order of winding up.

Key Points:

This provision helps establish a legal point of commencement of the winding-up process, which is crucial for:

Determining the validity of transactions made by the company.

Identifying any fraudulent preferences or avoidance of transactions.

Fixing responsibility of the company’s officers and directors during the winding-up period.

It applies specifically to winding up by the Tribunal, not voluntary winding up.

Purpose:

To protect the interests of creditors and stakeholders by ensuring that any misconduct or improper transaction after the filing of the petition (but before the winding-up order) can still be scrutinized and reversed if necessary.

 

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