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CS Executive · Company Law and Practice · Annual Report - Concepts

Gujarat Rail Infra Ltd, a Government company, is in liquidation. The Central Government is not a member, and only the Government of Gujarat holds shares. What is the position regarding the annual report requirement?

Sections 395 and 394 continue to apply, so far as may be, to a Government company in liquidation just as to any other Government company. The Government of Gujarat must therefore still cause the report to be prepared and laid before its legislature.

  1. AThe requirement lapses because the company is in liquidation
  2. BSections 395 and 394 apply so far as may be, as they apply to any other Government companyCorrect
  3. COnly the liquidator may prepare a report, with no legislature laying
  4. DOnly the Central Government may lay a report before Parliament

Explanation

Section 395(2) states that Sections 395 and 394 apply, so far as may be, to a Government company in liquidation as to any other Government company. So the State Government must still prepare and lay the annual report. The lapse option contradicts this provision.

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