Q.When is a company said to be dissolved? State the effects of dissolution.

A company is dissolved when the Tribunal passes a dissolution order (after a Tribunal winding up or a voluntary liquidation) or, for a struck-off company, when the Registrar's notice is published, and once dissolved it ceases to exist as a legal person.

Dissolution is the final legal act that brings the winding up and dissolution of a company to its true conclusion, and it can arise from any of the three routes studied in this chapter.

When dissolution takes effect.

• After Tribunal winding up. Once the Company Liquidator has completely wound up the company's affairs and prepares a final report, he applies to the Tribunal for dissolution; if satisfied, the Tribunal orders that the company be dissolved from the date of that order, and a copy is sent to the Registrar to be recorded and published.
• After voluntary liquidation under the IBC. Similarly, once the voluntary liquidator has completed realising and distributing the liquidation estate, an application is made to the Adjudicating Authority (the NCLT), which, if satisfied, passes an order dissolving the corporate person, a copy of which is then sent to the Registrar.
• After striking off under Section 248. Here, dissolution takes effect on the date the Registrar's notice striking off the company's name is published in the Official Gazette, without a separate Tribunal application ordinarily being needed.

Effects of dissolution.

1. The company ceases to exist as a legal person; its name is removed from the Register of Companies.
2. It can no longer sue or be sued, enter into contracts, or hold property in its own name.
3. Its books and papers may eventually be disposed of, though they must generally be preserved for a minimum period in case any question about the winding up arises later.
4. Any property that remains undistributed and unclaimed after dissolution typically vests in the Government as bona vacantia, since there is no longer any legal person to own it.
5. The liability of directors, officers, or members that the law has expressly kept alive — for instance, under Section 248(7) for a company struck off, or where fraud/misfeasance during management is later discovered — can still be enforced, even though the company itself has ceased to exist. …

A common mistake is to think dissolution and the winding-up order happen on the same date — in reality, dissolution comes only at the very end, often long after t …