Sections 373 and 374 of Companies Act 2013: Stay of Suits on Winding Up and Registration Obligations
Updated: 17 September 2026
Sections 373 and 374 form part of Part I of Chapter XXI of the Companies Act, 2013, dealing with entities authorised to register as companies under the Act. Section 373 restricts suits and other legal proceedings after a winding up order or appointment of a provisional liquidator. Section 374 sets out obligations that must be met by an entity seeking registration under this Part.
Contents
Section 373 - Suits stayed on winding up order
Meaning: Section 373 protects the collective winding up process of a company registered under Part I of Chapter XXI. Once the specified winding up event occurs, a creditor or other person cannot independently proceed with or start a covered legal proceeding against the company or a contributory in respect of a company debt without permission of the Tribunal.
Statutory provision
Where an order has been made for winding up, or a provisional liquidator has been appointed for, a company registered in pursuance of this Part, no suit or other legal proceeding shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company, except by leave of the Tribunal and except on such terms as the Tribunal may impose.
Section 374 - Obligations of companies registering under this Part
Meaning: Section 374 prescribes creditor-protection, public-notice and dissolution-related requirements for an entity seeking registration as a company under Part I of Chapter XXI.
Requirements under Section 374
Every company seeking registration under this Part shall:
(a) ensure that its secured creditors, before registration, have consented to or given their no objection to the proposed registration;
(b) publish advertisements in one English newspaper and one vernacular-language newspaper, in the prescribed form, giving notice of the proposed registration, inviting objections and suitably addressing the objections received;
(c) file a duly notarised affidavit from all members or partners providing that, upon registration under this Part, the necessary documents or papers will be submitted to the authority with which the earlier entity was registered for its dissolution, whether it was a partnership firm, limited liability partnership, co-operative society, society or another business entity, as applicable; and
(d) comply with such other prescribed conditions.
Proviso: On registration as a company under this Part, a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 is deemed to be dissolved under that Act without any further act or deed.
The proviso relating to limited liability partnerships was inserted by the Companies (Amendment) Act, 2017 and took effect on 15 August 2018.
Practical effect of Sections 373 and 374
Section 373 operates after a winding up order or appointment of a provisional liquidator in relation to a company registered under this Part. Its purpose is to place covered debt proceedings under Tribunal supervision during winding up. Section 374 operates at the registration stage and requires secured-creditor consent or no objection, public notice, dissolution-related documentation and compliance with prescribed conditions.
These provisions should be read in context with Sections 366 to 372, which deal with eligibility for registration, the certificate of registration, vesting of property, preservation of existing liabilities, continuation of pending proceedings, the effect of registration and the Court's power to stay or restrain proceedings.