Distinction between Winding-up and Dissolution

Q 27. What is meant by Misfeasance? Under what circumstances can the Official Liquidator initiate misfeasance proceedings against the Auditor of the Company? Is
there any time limit for initiating such proceedings? fC.A. (Final)November, 1999J

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Misfeasance
There is no distinct wrongful act known to law as "Misfeasance". Section 543 provides for liability in case of misfeasance by certain persons. There are two conditions of
liability under Section 543, i.e.: '
(i) an act in the nature of breach of trust;
(ii) an act which results in loss to the company.
In the course of winding-up of a company, it might come to light, that some person
who has taken part in the promotion or formation of the company, or any past or present Director, Manager, Liquidator or Officer including the Auditor of the company
(a) has misapplied or retained any money or property of the company; or
(b) has been guilty of any misfeasance or breach of trust in relation to the
company.
In such a case, the Liquidator or any creditor or contributory of the company may apply to the Court to examine into the conduct of the person or delinquent offiCer and compel him to repay or restore the money or property with interest at such rate as the Court may think just, or to contribute such sum to the assets of the com.pany by way of compensation in respect of the misapplication, retainer, misfeasance or breach ot trust, as the Court thinks just.
If the Auditors are found or discovered to have been guilty of any misfeasance or breach of trust in relation to the company, such liability may arise due to nQ1)-performance or unsatisfactory performance of duties by the auditors in relatiQn to the accounts of the company, as a result of which the company has suffered losses. This liability is a civil liability and the court may call upon the auditors only if the business of the company is in the course of being wound up.
The application must be made within 5 years from the date of the order' of winding-up or the first appointment of Liquidator or of the misapplication, retamer, misfeasance or breach of trust as the case may be, whichever is longer. [Section 543(2) of the Companies Act].

Q 28. Distinguish between 'Winding-up' and 'Dissolution of a company'.

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Distinction between Winding-up and Dissolution
Winding-up
Winding-up of a company is the process whereby its life is ended and its property,
administered for the benefit of its creditors and members. An administrator, called liquidator, is appointed and he takes control of the company, collects its assets, pays its debts and finally distributes any surplus among the members in accordance with their rights. In the words of Perrins and ]effrys, winding-up means applying the assets