Q.State the modes of winding up of a company recognised under the current legal framework in India.

Under the law as it stands today, a company can be wound up either compulsorily by the Tribunal under the Companies Act, 2013, or voluntarily under the Insolvency and Bankruptcy Code, 2016.

The Companies Act, 2013 now provides only for winding up by the Tribunal; voluntary winding up has been shifted out of that Act entirely and is governed instead by Section 59 of the IBC, available to a solvent company that chooses to liquidate itself.

In this Gujarat board Std 12 Secretarial Practice chapter, it is important to state the modes of winding up as the law currently stands, rather than as older material may have described them.

Historical position. The Companies Act, 2013, as originally enacted, provided for two modes of winding up: winding up by the Tribunal, and voluntary winding up, with voluntary winding up further split into a members' voluntary winding up (for a solvent company) and a creditors' voluntary winding up (for an insolvent company, giving creditors greater control).

Current position. The Insolvency and Bankruptcy Code, 2016 removed the voluntary-winding-up provisions from the Companies Act altogether and shifted voluntary liquidation to Section 59 of the IBC. As a result, only two modes remain valid today:

1. Winding up by the Tribunal, under the Companies Act, 2013 — a compulsory process ordered by the NCLT on a petition, on one of the grounds set out in Section 271 (special resolution, conduct against the State/public order, fraudulent conduct, prolonged default in statutory filings, or the residual "just and equitable" ground).
2. Voluntary liquidation, under Section 59 of the Insolvency and Bankruptcy Code, 2016 — available only to a solvent company (one that is not in default and can pay all its debts in full), initiated by a declaration of solvency and a resolution of the members (and, where debts are owed, the approval of creditors).

The older members'-voluntary/creditors'-voluntary split, based purely on solvency, no longer exists as a distinct legal category; an insolvent company today is instead dealt with under the Corporate Insolvency Resolution Process of the IBC, which is a different process altogether and may or may not culminate in liquidation.

Stating "members' voluntary winding up" and "creditors' voluntary winding up" as if they are still available exactly as under the old Companies Act is the single most common mistake on this topic; students should instead explain that voluntary liquidation has moved to the IBC and is available only to solvent companies.