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Tutorial-2 Can a sick company be revived (companies act)
Tutorial-2 Can a sick company be revived (companies act)
Hey guys !!! In our previous tutorial we discussed when can a company be declared as a sick company. Now let's suppose a company falls sick. Then what will happen. Will it remain sick or any efforts will be taken to recover its situation. Since a lot of persons are involved in relation to a company. Efforts will be made to revive the same. The following steps will be taken in this case.
Section 254 of the Companies Act, 2013 talks about the application for revival and rehabilitation and according to which any company that has been determined as sick company, can make an application to the tribunal to order for necessary steps to be taken for its revival and rehabilitation and the application shall be accompanied by-
The application shall be made to the tribunal within sixty days from the date of determination of the company as a sick company by the tribunal under section 253 of the Companies Act, 2013.
Once the application is made the tribunal shall fix a date of hearing and appoint an interim administrator. Such administrator shall within 45 days of his appointment fix a meeting with the creditors of the company and prepare a draft scheme for revival and present it before the tribunal within sixty days from the meeting.
Where no draft scheme is provided the tribunal shall direct the interim administrator to take over the management of the business and where an interim administrator is directed to take over the management of the company, the director and the management of the company shall provide full assistance and cooperation to the interim administrator.
The interim administrator shall appoint a committee of creditors such number of creditors as he may determine but shall not exceed seven and these members shall meet in all the meetings and the interim administrator may direct all the promoters, directors, key managerial personnel of the company to come in any meeting and furnish such information as is required and necessary.
Stay tuned for our next article to know what will happen next.
