Distinguish between ‘Members’ Voluntary Winding-up’ and ‘Creditors’

Members’ voluntary winding-up can be resorted to by solvent companies and thus requires the filing of Declaration of Solvency by the Directors of the company with the Registrar. Creditors’ winding-up, on the other hand, is resorted to by insolvent companies.

2. In Members’ 1Toluntary winding-up there is no need to have creditors’ meeting. But, in the case of creditors’ voluntary winding-up, a meeting of the creditors must be called immediately after the meeting of the members.

3. Liquidator, in the case of members’ winding-up, is appointed by the members. But in the case of creditors’ voluntary winding-up, if the members and creditors nominate two different persons as liquidators, creditors’ nominee shall become the liquidator.

4. In the case of Creditor’s voluntary winding-up, if the creditors so wish, a ‘Committee of Inspection’ may be appointed. In the case of Members’ voluntary winding-up, there is no provision for any such Committee.

5. The remuneration of liquidator/(s) is fixed by the members in case of Members’ voluntary winding-up (Section 490) whereas the same is to be fixed by the Committee of Inspection, if any, or by the creditors in case of Creditors’ voluntary winding-up (Section 504).