Prepare a brief note on Companies (Winding up) Rules, 2020, notified by MCA.

With a view to systemize the procedure of winding up of a Company under the Act, the Ministry of Corporate Affairs ('MCA') vide notification dated 24th January 2020, had notified the Companies (Winding Up) Rules, 2020 ('The Rules)). The Rules are applicable to companies going into "winding up for the circumstances mentioned u/s 271" as well as "Summary procedure for liquidation u/s 361" of the Companies Act, 2013. The Rules comprise of 191 rules and 95 forms and shall become applicable from 1st April 2020. Important highlights: It allows the following companies (on the basis of latest audited balance sheet) to wind up their business by making an application to Central Government without approaching NCLT Companies accepting deposit and having total outstanding deposits Upto ₹ 25 Lacs Companies having total outstanding loan including secured loan Upto ₹ 50 Lacs Companies having total turnover Upto ₹ 50 Crores Companies with Paid up share capital Upto ₹ 1 Crore Above companies are allowed to approach Central Government for summary liquidation only if they have book value of assets upto ₹ 1 crore. The provisions of the rules relating to filing and audit of the Company Liquidator's accounts and its procedure as well as disposing of assets shall be applicable to above class of companies with the Central Government instead of NCLT It lays down the process for meeting of creditors and contributories of the Company, and specifies the scenarios in which creditors can and cannot vote; It makes it necessary for all the money lying in the bank account of Company Liquidator, which is not immediately required for the purposes of winding up, to be invested in government securities or in interest bearing deposits in any scheduled bank; It lay down the procedure for maintenance of registers and books of accounts by the Company Liquidator; and It also outlines the procedure for creditors to prove their debts and claims against the company and if the proof of such debt gets rejected by the Company Liquidator, there is also a provision and process for creditor to make an appeal to Tribunal. Thus, the winding up rules has reduced the burden of winding up on NCLT by shifting the power to Central Government in specified cases, which will help in shortening the winding up timelines drastically.