Sections 361 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.
Sections 361 to 365 give the Central Government a fast-track way to wind up a small company. If the company has assets of book value not exceeding one crore rupees and belongs to a prescribed class, the Central Government may order it wound up by summary procedure, with the Official Liquidator taking over, selling assets within sixty days, settling creditors' claims and reporting for dissolution.
Under section 361, a company with assets of book value not exceeding ₹1 crore and belonging to a prescribed class can be ordered by the Central Government to be wound up by summary procedure. The Official Liquidator is appointed, reports within thirty days (including any fraud), disposes of assets within sixty days, calls on creditors to prove claims, and on a final report the Central Government or the Tribunal orders dissolution. A creditor can appeal to the Central Government within thirty days. The Corporate Laws (Amendment) Bill, 2026 proposes changes that are pending and not law.
Context: a Central Government route
Most winding up by the Tribunal is run through the Tribunal on the grounds in section 271 (see grounds for winding up by the Tribunal). Inability to pay debts and voluntary winding up are now dealt with under the IBC. Sections 361 to 365 are different: the order is made by the Central Government, not the Tribunal, and the Tribunal comes in only if a matter is referred to it. The Official Liquidator is the office described in sections 359 and 360.
Section 361: who can be wound up summarily
| Sub-section | Rule |
|---|---|
| (1) | Where the company to be wound up under this Chapter (i) has assets of book value not exceeding one crore rupees and (ii) belongs to such class or classes of companies as may be prescribed, the Central Government may order it to be wound up by summary procedure |
| (2) | The Central Government shall appoint the Official Liquidator as the liquidator |
| (3) | The Official Liquidator shall forthwith take into custody or control all assets, effects and actionable claims to which the company is or appears to be entitled |
| (4) | Within thirty days of appointment he submits a report, in the prescribed manner and form, including whether in his opinion any fraud has been committed in promotion, formation or management of the company |
| (5) | If, on the report, the Central Government is satisfied that promoters, directors or other officers committed fraud, it may direct further investigation and a report within the time specified |
| (6) | After considering that report, it may order that winding up proceeds under Part I of the Chapter or under the summary Part |
Both conditions in sub-section (1) must be met as the text now stands. The fraud check in sub-sections (4) to (6) matters: a company that looks small can still be moved into ordinary winding up if there are signs of fraud.
If your company is being considered for summary winding up, or you are a creditor with a claim, our legal dispute resolution team can help you read the order and plan the response.
Section 362: selling assets and recovering dues
- The Official Liquidator shall expeditiously dispose of all movable and immovable assets within sixty days of his appointment.
- Within thirty days of appointment he serves notice on debtors or contributories to deposit, within thirty days, the amount payable to the company.
- If a debtor does not deposit, the Central Government may, on his application, pass such orders as it thinks fit.
- Amounts recovered are deposited as provided in section 349 (public account of India; see liquidation money and the dividend account).
Section 363: settling creditors' claims
Within thirty days of appointment, the Official Liquidator calls on creditors to prove their claims, in the prescribed manner, within thirty days of receipt of the call. He prepares a list of claims in the prescribed manner and communicates to each creditor whether the claim is accepted or rejected, with reasons recorded in writing.
Section 364: appeal by creditor
- A creditor aggrieved by the Official Liquidator's decision under section 363 may appeal to the Central Government within thirty days of the decision.
- After calling a report from the Official Liquidator, the Central Government may dismiss the appeal or modify the decision.
- The Official Liquidator pays creditors whose claims have been accepted.
- At any stage of settlement, the Central Government may, if it considers it necessary, refer the matter to the Tribunal for orders.
Section 365: dissolution
When the Official Liquidator is satisfied that the company is finally wound up, he submits a final report to the Central Government (if there was no reference to the Tribunal under section 364(4)) or to both the Central Government and the Tribunal (in any other case). On receipt, the Central Government or the Tribunal, as the case may be, orders the company to be dissolved. The Registrar then strikes the name off the register of companies and publishes a notification. Compare the Registrar's own strike-off power in company strike-off under section 248.
| Stage | Who | Time in the text |
|---|---|---|
| Order for summary winding up | Central Government | No time stated |
| Report including fraud view | Official Liquidator | 30 days from appointment |
| Notice to debtors | Official Liquidator | 30 days from appointment; debtors then have 30 days to deposit |
| Sale of assets | Official Liquidator | 60 days from appointment |
| Call for creditors' claims | Official Liquidator | 30 days from appointment; claims within 30 days of receipt |
| Appeal by creditor | To Central Government | 30 days from the decision |
Proposed change (Corporate Laws (Amendment) Bill, 2026)
Clauses 78 to 80 of the Bill, which was introduced in the Lok Sabha on 23 March 2026, examined by a Joint Parliamentary Committee (report dated 3 August 2026) and is not law as on 30 September 2026, propose the following.
- Section 361(1): the words "under this Chapter" would be replaced by "in accordance with the provisions of this Chapter under the circumstances referred to in clauses (a), (b) and (d) of section 271", and the "and" between the asset test and the class test in clause (i) would become "or".
- Section 361(2): the Central Government would either appoint the Official Liquidator, or appoint a registered insolvency professional under the IBC as liquidator to carry out the functions of the Official Liquidator under this Part.
- Section 361(5): further investigation would be by the Official Liquidator or an officer not below the rank of Assistant Director authorised by the Central Government, with the report due within the time the Government "may direct".
- Section 361(6): "under the provision" would read "continued under the provision". An Explanation would make "Official Liquidator" in sections 361 to 365 include an insolvency professional appointed under sub-section (2).
- Section 365(3): "notification" would become "notice in the Official Gazette" (clause 79).
- New section 365A (clause 80): any person aggrieved by an order of the Central Government under this Part could appeal within forty-five days of receipt of the order to the Appellate Tribunal, in the prescribed manner and on payment of the prescribed fee.
Until enacted and notified, the present text applies, including the thirty-day appeal to the Central Government under section 364.
Need help with a summary liquidation?
A summary winding up moves on short clocks, and missing a thirty-day step can cost a creditor an appeal or a director a chance to be heard. Our legal dispute resolution team can help you track the timeline and assemble claims or responses.
Key takeaways
- The Central Government, not the Tribunal, orders summary winding up for companies with assets of book value up to ₹1 crore in a prescribed class.
- The Official Liquidator reports within 30 days, sells assets within 60 days, and handles creditors' claims.
- Suspected fraud can shift the case to ordinary winding up.
- Creditors appeal to the Central Government within 30 days; the Tribunal is involved only on reference.
- The Bill 2026 proposes insolvency professionals as liquidators and an appeal to the Appellate Tribunal in 45 days; both are pending.
Read next
- Official Liquidator: sections 359–360
- Registration of existing entities: sections 366–374
- Striking off vs winding up: which is right for your company
- Dissolution after winding up: the final step
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.