Corporate and Economic Laws · Accounts and Audit

Audit of Company Liquidator's Accounts under Section 294

Updated 11 October 2026 · Fact-checked

Under section 294 of the Companies Act, 2013, the Company Liquidator must keep proper books, present receipts and payments accounts to the Tribunal at least twice a year, and have them audited as the Tribunal directs. Audited copies go to the Tribunal and the Registrar, and printed copies to creditors and contributories.

Understand Audit of Company Liquidator's Accounts

When a company is wound up, the Company Liquidator collects its assets, pays its debts and distributes the rest. He handles other people's money. Section 294 makes him accountable for it through regular accounts and an audit.

The first duty is to keep proper and regular books of account, including accounts of receipts and payments, in the form and manner prescribed. Think of it as a running cash record of the winding up.

The second duty is to present an account of receipts and payments to the Tribunal. This must be done at the times prescribed, and not less than twice in each year of his tenure. The account is in the prescribed form, in duplicate, and is verified by a declaration in the prescribed form and manner.

The third step is the audit. The Tribunal causes the accounts to be audited in such manner as it thinks fit. The liquidator must furnish the vouchers and information the Tribunal requires. The Tribunal may at any time require production of, and inspect, any books he keeps.

After audit, the accounts become public. One copy is filed with the Tribunal. The other is delivered to the Registrar and is open to inspection by any creditor, contributory or person interested. The liquidator also sends printed accounts, or a summary, to every creditor and contributory, unless the Tribunal dispenses with this. For a Government company, a copy also goes to the Central and/or State Government that is a member.

Key rules to remember

Books of account (s 294(1)): Company Liquidator keeps proper and regular books, including receipts and payments accounts, in the prescribed form and manner; The duty is on the liquidator himself.
Presentation to Tribunal (s 294(2)): Account of receipts and payments → Tribunal, at prescribed times, not less than twice in each year, in prescribed form, in duplicate, with verifying declaration; Twice a year is the minimum, not the fixed number.
Audit (s 294(3)): Tribunal causes accounts to be audited in such manner as it thinks fit; The Tribunal decides the manner of audit. The liquidator supplies vouchers and information.
Filing after audit (s 294(4)): One copy → Tribunal; other copy → Registrar (open to inspection by any creditor, contributory or person interested); Do not swap the two recipients.
Government company (s 294(5)): Copy → Central Government if it is a member; → State Government if it is a member; → both if both are members; Only the Government that is a member receives the copy.
Printing and circulation (s 294(6)): Audited accounts or summary printed and posted to every creditor and every contributory; The Tribunal may dispense with this in any case it deems fit.

How to solve Audit of Company Liquidator's Accounts questions

Most questions give a liquidation scenario and ask what the liquidator must do or whether he has complied. Work through the section in the order it runs.

1Identify that the question concerns the accounts of a Company Liquidator in a winding up, so section 294 applies.
2Check the books: has he maintained proper and regular books, including receipts and payments accounts, in the prescribed form?
3Check presentation: were accounts presented to the Tribunal in the prescribed form, in duplicate, with a verifying declaration, at least twice in each year of tenure?
4Check the audit: the Tribunal causes the audit in the manner it thinks fit. Note the liquidator's duty to furnish vouchers and information, and the Tribunal's power to inspect books.
5Trace the audited copies: one to the Tribunal, one to the Registrar, open to inspection by creditors, contributories and interested persons.
6Add the extras if the facts call for them: a copy to the Central or State Government for a Government company, and printed accounts or summary to every creditor and contributory, subject to the Tribunal's power to dispense.
7State your conclusion clearly, citing section 294 and the relevant sub-section.

Quickest way: Books – Present – Audit – File – Circulate

When to use it: Use for MCQs and short-note questions where you must recall who does what and to whom.

Books: liquidator keeps them.
Present: to the Tribunal, at least twice a year, in duplicate, with declaration.
Audit: Tribunal arranges, in the manner it thinks fit.
File: one copy to the Tribunal, one to the Registrar.
Circulate: printed accounts or summary to creditors and contributories, and a copy to the member Government if it is a Government company.

Common mistakes in Audit of Company Liquidator's Accounts

Saying the company's statutory auditor audits the liquidator's accounts.
Students link audit with section 139 and 143 appointments.
Fix: Under section 294(3), the Tribunal causes the audit in such manner as it thinks fit. The Tribunal controls it.
Stating that accounts are presented once a year.
Annual accounts are the norm in a going concern.
Fix: Section 294(2) requires presentation not less than twice in each year of the liquidator's tenure.
Saying both audited copies go to the Tribunal, or both to the Registrar.
Students remember two copies but not the recipients.
Fix: One copy is filed with the Tribunal and the other delivered to the Registrar.
Sending a copy to the Central Government for every company.
Mixing up the general rule with the Government company rule.
Fix: Only for a Government company, and only to the Government that is a member: Central, State or both.
Treating circulation to creditors and contributories as compulsory in every case.
The proviso is overlooked.
Fix: Section 294(6) allows the Tribunal to dispense with it in any case it deems fit.
Mixing this section with the auditor's powers in section 143.
Both sections deal with audit and appear in the same chapter.
Fix: Section 143 covers the auditor of a company in operation. Section 294 covers a liquidator's accounts in winding up.

Worked examples

Example 1

Sunrise Textiles Ltd is being wound up. The Company Liquidator has presented his receipts and payments account to the Tribunal only once in the year since his appointment. Has he complied with section 294? Explain.

Show the solution

Section 294(2) requires the account of receipts and payments to be presented to the Tribunal at the prescribed times, not less than twice in each year during his tenure.
Here the account was presented only once in the year.
The minimum frequency of twice a year is not met, unless facts show his tenure in that year was too short to require it. No such fact is given.

Answer: No, he has not complied. He must present the account at least twice in each year of his tenure, in the prescribed form, in duplicate, with a verifying declaration.

Example 2

The accounts of Bharat Steel Ltd, a Government company whose shares are held by the Central Government and the State Government of Odisha, have been audited in a winding up. State what the Company Liquidator must do with the audited accounts.

Show the solution

Under section 294(4), one copy is filed with the Tribunal and the other is delivered to the Registrar. The Registrar's copy is open to inspection by any creditor, contributory or person interested.
Under section 294(5)(c), as both Governments are members, the liquidator must forward a copy to the Central Government and the State Government.
Under section 294(6), he must have the audited accounts, or a summary, printed and posted to every creditor and every contributory, unless the Tribunal dispenses with this.

Answer: File one copy with the Tribunal and deliver the other to the Registrar. Forward a copy to both the Central and the State Government. Send printed accounts or a summary to every creditor and contributory, unless the Tribunal dispenses with it.

Exam tips

Learn the sub-section sequence (1) to (6) as a flow: books, present, audit, file, Government copy, print and post.
In MCQs, watch the numbers: twice a year, in duplicate, and two filing copies.
State who controls the audit: the Tribunal, not the liquidator or the company.
For Government company questions, match the copy to the member Government, as in clauses (a), (b) and (c) of sub-section (5).
Cite section 294 with the sub-section in written answers. It signals precision.

Practice questions from Accounts and Audit

Audit of Company Liquidator's Accounts in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Audit of Company Liquidator's Accounts: frequently asked questions

Who audits the Company Liquidator's accounts?

Section 294(3) says the Tribunal shall cause the accounts to be audited in such manner as it thinks fit. The liquidator must furnish the vouchers and information the Tribunal requires.

How often must the liquidator present accounts to the Tribunal?

At such times as may be prescribed, but not less than twice in each year during his tenure. The account is in the prescribed form, in duplicate, verified by a declaration.

Who can inspect the audited accounts?

One copy is delivered to the Registrar, and that copy is open to inspection by any creditor, contributory or person interested.

Must accounts always be printed and sent to creditors?

The liquidator must have the audited accounts or a summary printed and posted to every creditor and contributory. The Tribunal may dispense with this in any case it deems fit.