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Sec. 555 ? not getting it

CA Sahil Singla.. (Service Tax ) (3746 Points)

24 October 2011

Sir

Section 555 of Co. Act 1956 is regarding the payment of certain amounts by Liquidator in the Liquidation Account of Companies. What is it all about ? i tried to understanf from the Book but not getting it. Plz explain ?

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Giridhar S Karandikar (Team Lead) (7548 Points)
Replied 06 December 2011

The said Section 555 states as below:

2555. Unpaid dividends and undistributed assets to be paid into the

Companies Liquidation Account.—3[(1) Where any company is being woundup,

if the liquidator has in his hands or under his control any money

representing—

(a) dividends payable to any creditor which had remained unpaid for six

months after the date on which they were declared, or

(b) assets refundable to any contributory which have remained undistributed

for six months after the date on which they become refundable,

this means that if after the company is being wound up there’s any amount by way dividends which has remained unpaid to the creditors of the company for a period of 6m from the date they were declared in the AGM of the company and where any assets that are required to be distributed to any contributory are remaining undistributed for a period of six months from they date they became payable, then such amounts shall be kept by the liquidator into the companies liquidation account.

Thus from the above we can say that any money which represents as ‘Unpaid Dividends’ or Undistributed assets at the date of dissolution shall be deposited by the liquidator into this account.