Liquidation of companies: An analysis of the position in India after the enactment of The Companies Act, 2013

Abstract

The enactment of The Companies Act, 2013, paves the way for the corporate sector to go for self-managed
and controlled action while ensuring strict transparency for increased disclosure for improved compliance,
with a motive to promote an environment of ease of doing business for companies in India. Business of
companies is the most important driver for the economy to fulfil the needs of society in a country on behalf
of the government. Liquidation of the companies in India means a legal process of the dissolution of the
companies’ affairs, preceded with realization of its assets and distributing it with their creditors and
shareholders. Liquidation in India was completely covered under the Companies Act, 2013, however after
the enactment of Insolvency and bankruptcy code 2016, the liquidation of the companies is being done
either by the Act, 2013 or by Code 2016. Present study aims to analyze the dissolution trend of companies
during the last eight years after the enactment of the Companies Act, 2013. The study will also lead to a
conclusion based on an analysis of secondary data in the form of reports presented by the ministry of
corporate affairs, government of India in terms of establishing the impact of the Companies Act, 2013, i.e.,
favorable or unfavorable for companies in the country and further to give an insight for future research.
This article aims to seek attention of the policymakers of the country to work for more effective
mechanisms to deal with corporate entities in a globalized world to move from a profit-orientation approach
to wealth maximization.