Sections 286 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Three short sections round off this stage of a winding up by the Tribunal. Section 286 makes a director or manager with unlimited liability contribute as if he were a member of an unlimited company. Section 287 lets the Tribunal set up an advisory committee to advise the liquidator. Section 288 requires the liquidator to report to the Tribunal at least every quarter.
Under s.286, a director or manager of a limited company whose liability is unlimited under the Act must make a further contribution on winding up, with three limits: not if he left office a year or more before winding up, not for debts contracted after he left, and, subject to the articles, only if the Tribunal considers it necessary. Under s.287 the Tribunal may direct an advisory committee of not more than twelve members, chaired by the liquidator. Under s.288 the liquidator reports at least quarterly.
Context after the IBC
Since the Insolvency and Bankruptcy Code, 2016, inability to pay debts and voluntary winding up are dealt with under the IBC. Winding up by the Tribunal under the Companies Act continues on the grounds left in section 271. These three sections then govern the liability of certain directors, how creditors and contributories can be consulted, and how the Tribunal keeps track of progress. They follow the list of contributories in section 285.
If you are a director, creditor or contributory in a winding up, our legal dispute resolution team can help you understand your exposure and how to take part.
Section 286: further contribution by directors and managers
"In the case of a limited company, any person who is or has been a director or manager, whose liability is unlimited under the provisions of this Act, shall, in addition to his liability, if any, to contribute as an ordinary member, be liable to make a further contribution as if he were at the commencement of winding up, a member of an unlimited company."
Two points follow from the text:
- It applies only to a limited company and only to a director or manager whose liability is unlimited under the Act. The section does not itself create unlimited liability; it says what happens when the Act has made liability unlimited elsewhere. Check the provision that applies to your company before assuming the section bites.
- The further contribution is in addition to any liability as an ordinary member.
| Proviso | Protection |
|---|---|
| (a) | No further contribution if he ceased to hold office a year or upwards before commencement of winding up |
| (b) | No further contribution for a debt or liability contracted after he ceased to hold office |
| (c) | Subject to the articles, no further contribution unless the Tribunal deems it necessary to require it to satisfy debts and liabilities and the costs, charges and expenses of winding up |
Proviso (c) is the real filter: the Tribunal must consider the contribution necessary before requiring it.
Section 287: the advisory committee
Sub-sections (1) to (3): setting it up
- Discretion. The Tribunal "may", while passing the winding-up order, direct that there shall be an advisory committee to advise the Company Liquidator and to report to the Tribunal on matters it directs.
- Size and members. Not more than twelve members, being creditors and contributories or such other persons in such proportion as the Tribunal directs, keeping in view the company's circumstances.
- First meeting. The Company Liquidator convenes a meeting of creditors and contributories, as ascertained from the books and documents, within thirty days from the date of the winding-up order, so the Tribunal can decide who will be members.
Sub-sections (4) to (6): working
- The committee has the right to inspect the books of account and other documents, assets and properties of the company under liquidation at a reasonable time.
- Meetings, procedure and conduct of business are as prescribed. The Companies (Winding Up) Rules, 2020 may be the source; I am stating this from general knowledge, so please confirm the current rules.
- The Company Liquidator chairs the meetings.
Not the same as the winding up committee
Section 277 requires the liquidator to apply within three weeks for a separate three-member winding up committee (Official Liquidator, secured creditors' nominee, professional nominated by the Tribunal). The advisory committee under section 287 is optional, larger and drawn mainly from creditors and contributories. See section 277 for the first.
Section 288: periodical reports and review
| Sub-section | Rule |
|---|---|
| (1) | The Company Liquidator makes periodical reports to the Tribunal, and in any case a report at the end of each quarter on the progress of winding up, in the form and manner prescribed |
| (2) | The Tribunal may, on an application by the Company Liquidator, review its orders and make such modifications as it thinks fit |
This quarterly report sits alongside the monthly report with committee minutes under section 277(6). Sub-section (2) is notable: the power to review is exercised only on the liquidator's application, according to the text.
The report required under section 281 is a one-time, sixty-day report; section 288 is the continuing update. For the final stage, see dissolution after winding up.
Who is affected
- Directors and managers should read section 286 against the provision that makes their liability unlimited, and against the one-year and post-exit limits.
- Creditors and contributories may be asked to serve on the advisory committee, with inspection rights over books and assets.
- Liquidators have a thirty-day meeting obligation and quarterly reporting.
Proposed change
The Corporate Laws (Amendment) Bill, 2026 has no clause amending section 286, 287 or 288. Its winding-up clause touches section 271 only. The Bill is pending and is not law as on 30 September 2026.
Practical examples
Example 1: a former director. A director resigned 14 months before winding up began. Even if the Act had made his liability unlimited, proviso (a) of section 286 protects him from the further contribution.
Example 2: committee constituted. While ordering winding up, the Tribunal directs an advisory committee of nine members, mostly creditors. The liquidator convenes a meeting within thirty days of the order so the Tribunal can decide the members, and chairs the committee afterwards.
Example 3: quarterly report. The liquidator files a report at the end of each quarter on asset recovery and sale. Finding that a past direction no longer suits the case, he applies under section 288(2), and the Tribunal may modify its order.
Need help as a director or creditor in a winding up?
Exposure under section 286, a seat on the advisory committee or the progress reports all raise practical questions. We can review the order and the documents with you and explain the options. Reach out through legal dispute resolution.
Key takeaways
- Section 286 adds a further contribution for directors or managers whose liability is unlimited under the Act, in a limited company.
- Three provisos protect them: one year out of office, debts after exit, and the Tribunal's necessity test subject to the articles.
- The Tribunal may direct an advisory committee of up to twelve members, chaired by the liquidator.
- The liquidator convenes the first meeting of creditors and contributories within thirty days of the order.
- The committee can inspect books, documents, assets and properties.
- The liquidator must report at least at the end of each quarter, and may apply for review of orders.
- The Bill, 2026 does not amend these sections and is not law.
Read next
- Section 285: List of contributories
- Sections 290–292: Powers and duties of the Company Liquidator
- Section 277: Intimation of the winding-up order and winding up committee
- Misfeasance proceedings against directors in winding up
Disclaimer: Based on the Companies Act, 2013 as amended up to 1 April 2021 (official consolidated text), read with later developments noted in the article; proposals in the Corporate Laws (Amendment) Bill, 2026 are pending and not law as on 30 September 2026. Verify current notifications and rules before acting.