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CS Professional · Insolvency and Bankruptcy - Law and Practice · Winding-Up by Tribunal

Ms Rao holds fully paid shares in Ganga Chemicals Ltd, which has no assets left. She was allotted the shares originally and has held them for 8 months within the 18 months before commencement of winding up. She wishes to petition for winding up as a contributory. Under section 272, what is the position?

She is entitled to present the petition. Section 272(2) allows a contributory to petition despite holding fully paid shares or the company having no assets, provided the shares were allotted to her or held at least six months in the preceding eighteen months.

  1. AShe cannot petition because her shares are fully paid
  2. BShe cannot petition because the company has no surplus assets
  3. CShe can petition only with prior sanction of the Central Government
  4. DShe is entitled to petition despite fully paid shares and absence of assets, as she meets the six-month holding conditionCorrect

Explanation

Section 272(2) lets a contributory petition even if holding fully paid shares or if the company has no assets or no surplus. The shares must be originally allotted or held for at least six months in the eighteen months before commencement. Ms Rao's 8 months satisfies this; sanction is required only for the Registrar.

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