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CS Professional · Compliance Management, Audit and Due Diligence · Signing and Certification

Sagar Exports Ltd is in voluntary liquidation. Its business letters still carry only its old name with no statement of winding up. The liquidator wilfully permitted this. What is the position?

Both the company and the liquidator who wilfully permitted the omission are punishable with a fine of not less than Rs 50,000 and up to Rs 3 lakh. Business letters and invoices of a company being wound up must state that it is being wound up.

  1. ACompany and the wilfully permitting liquidator are punishable with fine of Rs 50,000 to Rs 3 lakhCorrect
  2. BOnly a warning is issued, with no fine
  3. CFine up to Rs 10,000 only on the company
  4. DImprisonment for one year for the liquidator

Explanation

Section 344 requires invoices, orders and business letters to state that the company is being wound up. Contravention makes the company, and any officer, liquidator, receiver or manager who wilfully authorises or permits it, punishable with fine of Rs 50,000 to Rs 3 lakh.

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