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CS Professional · Corporate Restructuring, Valuation and Insolvency · Winding-up by Tribunal under the Companies Act, 2013

Ravi holds fully paid-up shares of Sagar Metals Ltd, allotted to him and registered in his name for ten months out of the eighteen months before the winding up commenced. The company has no assets left for shareholders after paying liabilities. Can Ravi present a winding-up petition as a contributory?

Yes, Ravi can petition. Section 272(2) lets a contributory petition even if his shares are fully paid or the company has no surplus assets, provided he held the shares registered in his name for at least six months within the eighteen months before winding up commenced.

  1. ANo, because his shares are fully paid-up
  2. BNo, because the company has no surplus assets for distribution
  3. CNo, because he held the shares for less than twelve months
  4. DYes, being a contributory he may petition even with fully paid shares and no surplus assets, as he held the shares for at least six months in the preceding eighteenCorrect

Explanation

Section 272(2) entitles a contributory to petition despite fully paid shares or absence of surplus assets, provided the shares were held and registered in his name for at least six months in the eighteen months before commencement. Ten months satisfies this; a twelve-month test does not exist.

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