Liquidation process

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 January 2013 Dear Sir,

Can anyone please clarify, in case of liquidation of company who will be given the first preference for payment- Employee or Statutory dues.

Also please share the liquidation process

Thanks in advance

CA Priyank Singhi

CA Priyank Singhi (Expert)
Follow

22 January 2013 Statutory dues will always be given the first preference. https://www.howtolaw.co.nz/liquidate-a-company-xidp392106.html

Querist : Anonymous

Querist : Anonymous (Querist)

22 January 2013 Dear Sir,

As per the company's act, section 529A (OVERRIDING PREFERENTIAL PAYMENTS), states that

(1) Notwithstanding anything contained in any other provision of this Act or any other law for the time being in force, in
the winding up of a company -
(a) workmen's dues ; and
(b) debts due to secured creditors to the extent such debts rank under clause (c) of the proviso to sub-section (1) of
section 529 pari passu with such dues,
shall be paid in priority to all other debts.
(2) The debts payable under clause (a) and clause (b) of sub-section (1) shall be paid in full, unless the assets are
insufficient to meet them, in which case they shall abate in equal proportions.

Just want to know whether the salary due of employee of the company working full time for the organisation comes under the workmen's due???

Will the statutory payment will be paid first or Employees due will be paid first???

CA Priyank Singhi

CA Priyank Singhi (Expert)
Follow

22 January 2013 https://india-financing.com/The_stacking_order_of_priorities_in_Secured_Lending.pdf

CA Priyank Singhi

CA Priyank Singhi (Expert)
Follow

22 January 2013 https://www.citelegal.com/1302-pf-dues-liquidated-public-ltd-co.html

CA Priyank Singhi

CA Priyank Singhi (Expert)
Follow

22 January 2013 Salary due is workmen's due. The above links should clarify your problem.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now