Dissolution of a Company by Tribunal: Section 302

Dissolution of a company by tribunal is the last order in a winding up. Section 302 of the Companies Act, 2013 says when the Company Liquidator must ask for it, when the Tribunal may make it without being asked, and what has to reach the Registrar afterwards. Section 356 then keeps the door ajar for two years, by letting the Tribunal declare a dissolution void as if it had never happened.

When does dissolution of a company by tribunal happen?

At the end, and the trigger is a state of affairs rather than a date. Section 302(1) states that When the affairs of a company have been completely wound up, the Company Liquidator shall make an application to the Tribunal for dissolution of such company. The duty is on the liquidator, and it is expressed as shall.

Section 302(2) then gives the Tribunal two routes to the same order. It shall, either on an application filed by the Company Liquidator under sub-section (1) or when the Tribunal is of the opinion that it is just and reasonable in the circumstances of the case that an order for the dissolution of the company should be made, make an order that the company be dissolved from the date of the order, and the company shall be dissolved accordingly.

The second route matters. The Tribunal does not have to wait for the liquidator's application if it takes the view that dissolution is just and reasonable. And the effective date is fixed by the section itself, from the date of the order, not from the date it reaches the Registrar.

A step comes before the application wherever a winding up committee has been constituted. Section 277(8) requires that the final report approved by the winding up committee shall be submitted by the Company Liquidator before the Tribunal for passing of a dissolution order in respect of the company, and section 277(6) has the liquidator report monthly till the final report for dissolution of the company is submitted. The committee, constituted under section 277(4), is part of the effect of the winding up order itself.

What has to reach the Registrar, and how fast?

A copy of the order, twice over. Section 302(3) was substituted by Act 29 of 2020, section 47, with effect from 21 December 2020, and sub-section (4) was omitted by the same section on the same date. As substituted, the Tribunal shall, within a period of thirty days form the date of the order:

• (a) forward a copy of the order to the Registrar who shall record in the register relating to the company a minute of the dissolution of the company; and
• (b) direct the Company Liquidator to forward a copy of the order to the Registrar who shall record in the register relating to the company a minute of the dissolution of the company.

Two things about how that sub-section is printed. The opening words read thirty days form the date of the order, with "form" where "from" is meant, and the footnote recording the substitution prints the commencement date as 21-212020, while the footnote to the omission of sub-section (4) on the same page prints it as 21-12-2020. Both are quoted here as printed.

The two clauses also describe the same act twice, once done by the Tribunal and once directed by it. Clause (a) has the Tribunal forward the copy; clause (b) has the Tribunal direct the liquidator to forward a copy; and in both the Registrar records the same minute in the same register.

How is dissolution by the Tribunal different from a strike off?

They reach the same end by different machinery, and only one of them presupposes a liquidation.

A strike off is an administrative removal of the name from the register, and section 248(8) preserves the Tribunal's winding up power alongside it. Dissolution under section 302 is the ordinary end point of a winding up begun on one of the section 271 grounds, and it comes only after the assets have been realised and distributed under the Company Liquidator's powers.

Section 303 preserves what came before the Act. Nothing in this Chapter shall affect the operation or enforcement of any order made by any Court in any proceedings for the winding up of a company immediately before the commencement of this Act, and an appeal against such an order shall be filed before such authority competent to hear such appeals before such commencement.

Can a dissolution be declared void?

Yes, for two years, and the section reaches dissolutions from outside Chapter XX as well. Section 356(1) provides that Where a company has been dissolved, whether in pursuance of this Chapter or of section 232 or otherwise, the Tribunal may at any time within two years of the date of the dissolution, on application by the Company Liquidator of the company or by any other person who appears to the Tribunal to be interested, make an order upon such terms as the Tribunal thinks fit, declaring the dissolution to be void, and thereupon such proceedings may be taken as if the company had not been dissolved.

Three features are worth marking. The two years run from the date of the dissolution, which section 302(2) fixed as the date of the order. The applicant class is open ended: any other person who appears to the Tribunal to be interested, not only the liquidator. And the consequence is retroactive in effect, since proceedings may then be taken as if the company had not been dissolved. The reference to section 232 brings in a dissolution ordered on a merger or amalgamation, so a company dissolved without winding up under a scheme is within the section too.

Section 356(2) was substituted by Act 29 of 2020, section 51, with effect from 21 December 2020, and mirrors the section 302(3) filing duty. The Tribunal shall (a) forward a copy of the order, within thirty days from the date thereof, to the Registrar who shall record the same; and (b) direct the Company Liquidator or the person on whose application the order was made, to file a certified copy of the order, within thirty days from the date thereof such further period as allowed by the Tribunal, with the Registrar who shall record the same.

Clause (b) is printed without a conjunction between from the date thereof and such further period as allowed by the Tribunal, and it is quoted as printed. The extension reads as thirty days, or such further period as the Tribunal allows. Clause (b) also differs from clause (a) in requiring a certified copy, and in naming the applicant as an alternative filer where the application was not the liquidator's.

Reading a dissolution therefore means checking four things: when the affairs were completely wound up, the date of the section 302(2) order from which the dissolution runs, whether the thirty day filings under section 302(3) were made, and whether the two year section 356 window has closed. Until it does, a dissolved company is not quite finished with.

Flock reports the filings themselves, each stamped with its date and linked back to the exchange or regulator that published it. What any of it means for you is your call to make.