According to the Companies Act, an unregistered company includes any partnership, association, or company consisting of more than seven persons at the time when petition for winding up is presented. But it will not cover the following:-
A railway company incorporated by an Act of Parliament or other Indian law or any Act of the British Parliament;
A company registered under the Companies Act, 1956;
A company registered under any previous company laws.
An illegal association formed against the provisions of the Act.
However, a foreign company carrying on business in India can be wound up as an unregistered company even if it has been dissolved or has ceased to exist under the laws of the country of its incorporation.
The provisions relating to winding up an unregistered company:-
Such a company can be wound up by the Tribunal but never voluntarily.
Circumstances in which unregistered company may be wound up are as follows:-
If the company has been dissolved or has ceased to carry on business or is carrying on business only for the purpose of winding up its affairs.
If the company is unable to pay its debts.
If the Tribunal regards it as just and equitable to wind up the company.
Contributory means a person who is liable to contribute to the assets of a company in the event of its being wound up. Every person shall be considered a contributory if he is liable to pay any of the following amounts:-
Any debt or liability of the company;
Any sum for adjustment of rights of members among themselves;
Any cost, charges and expenses of winding up;
On the making of winding up order, any legal proceeding can be filed only with the leave of the Tribunal.
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