The liquidator after realizing the assets of the company should distribute the proceeds among the below-mentioned claimants in the following order:
1. Legal charges
2. Liquidator's remuneration and cost of expenses of winding up
3. Workman's dues and claims of the secured creditors
4. Preferential creditors and creditors secured by floating charge
5. Unsecured creditors
Choose the correct answer from the options given below:

Correct option is C

The liquidation of assets in a company is governed by the Companies Act, 2013 (India) or similar laws globally, depending on jurisdiction. The proceeds are distributed in a specific hierarchical order:

1. Legal Charges (1):

   • First priority is given to legal expenses incurred for the realization and distribution of assets. These charges are necessary for the liquidation process.

2. Liquidator's Remuneration and Winding-Up Costs (2):

   • The liquidator is entitled to be paid for their efforts in carrying out the liquidation process, and this cost is prioritized after legal charges.

3. Workmen's Dues and Secured Creditors (3):

   • Secured creditors and workmen's dues are treated on par and paid simultaneously. Workmen’s dues have been accorded priority under the Insolvency and Bankruptcy Code (IBC) in India and similar international laws.

4. Preferential Creditors and Creditors Secured by Floating Charge (4):

   • Preferential creditors include government dues and unsecured creditors with a floating charge, such as unpaid taxes.

5. Unsecured Creditors (5):

   • The last priority is given to unsecured creditors, as they do not hold any specific claims over the assets of the company.

Thus, the correct order is: 1, 2, 3, 4, 5.

Information Booster:

1. Legal Charges:

   • Includes court fees and other legal expenses directly associated with the liquidation process.

2. Liquidator's Remuneration and Costs:

   • Compensation for the liquidator’s efforts, including administrative expenses of winding up.

3. Workmen's Dues and Secured Creditors:

   • Workmen’s dues enjoy parity with secured creditors. Secured creditors are those who hold specific assets as collateral.

4. Preferential Creditors:

   • Includes government dues, wages of employees (beyond workmen's dues), and claims secured by a floating charge.

5. Unsecured Creditors:

   • Includes trade creditors and others without security claims. They are paid after all secured and preferential claims are settled.