Sections 329 and 330 of the Companies Act 2013: Transfers That Are Void in Winding Up

Sections 329 and 330 form part of Chapter XX of the Companies Act, 2013 dealing with winding up. They protect the winding-up process and the body of creditors against specified transfers of company property that the law treats as void.

Current-law note: Section 329 was substituted by section 255 and the Eleventh Schedule to the Insolvency and Bankruptcy Code, 2016 with effect from 15 November 2016. The current provision refers to a petition for winding up by the Tribunal under the Companies Act and no longer contains the former reference to a resolution for voluntary winding up.

Section 329: Transfers not in good faith to be void

Meaning: Section 329 addresses certain transfers of property or deliveries of goods made by a company shortly before a winding-up petition. A transaction falling within the statutory conditions is void against the Company Liquidator.

Statutory substance: A transfer of movable or immovable property, or delivery of goods, made by a company within one year before presentation of a petition for winding up by the Tribunal under the Companies Act is void against the Company Liquidator unless it is made in the ordinary course of business or in favour of a purchaser or encumbrancer acting in good faith and for valuable consideration.

Essential elements of Section 329

The transaction may concern movable property, immovable property, or delivery of goods.
The relevant look-back period is one year before presentation of the winding-up petition to the Tribunal.
A transfer or delivery made in the ordinary course of the company's business is outside the invalidating rule.
The section also protects a purchaser or encumbrancer who acts in good faith and gives valuable consideration.
If the statutory exceptions do not apply, the transaction is void against the Company Liquidator.

Section 330: Certain transfers to be void

Meaning: Section 330 invalidates a transfer or assignment by a company of all its properties or assets to trustees for the benefit of all its creditors.

Statutory rule: Any transfer or assignment by a company of all its properties or assets to trustees for the benefit of all its creditors is void.

Difference between Sections 329 and 330

Section 329 focuses on specified pre-winding-up transfers or deliveries and includes express protections for transactions in the ordinary course of business and for good-faith purchasers or encumbrancers for value. Section 330 is directed at a company transferring or assigning all its properties or assets to trustees for the collective benefit of its creditors and declares that arrangement void.

Relationship with the Insolvency and Bankruptcy Code, 2016

The Insolvency and Bankruptcy Code, 2016 substantially reorganised India's corporate insolvency framework and amended Chapter XX of the Companies Act, 2013. Section 329 was specifically substituted through section 255 read with the Eleventh Schedule of the IBC. Accordingly, the amended text should be used instead of the earlier version that referred to voluntary winding up.

Official legal sources

For the latest statutory text and amendments, refer to the Ministry of Corporate Affairs and India Code. These official sources should be checked when applying the provisions to a particular winding-up or insolvency proceeding.

Article reviewed and updated: 17 September 2026.