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Winding up of Companies

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What is the definition of Winding Up?

Winding up is the procedure mentioned under Section 270 of the Companies Act, 2013 which puts an end to the life of a company. A company can be wound up either by the order of tribunal or by voluntary wind up which dissolves the company and end the corporate existence.

What is the purpose behind winding up of a company?

  • To put an end to life of the company in order to realize the assets and to pay the debts of the company;
  • The company does not cease to exist until it is dissolved.
  • The administration of company comes in hands of the liquidator who helps to settle the liabilities of company by paying off all the debts in order to dissolve the company.

Who can file a petition for winding up of a company?

  • By a Company.
  • Any of the contributors
  • The Registrar of Companies.
  • Any person authorized by the Central Government for such cause
  • By Central government under section 271 of the Companies Act.

What are various medium to wind up a company?

A company can be wind up in two ways:

  • Winding up by a Tribunal
  • Voluntary Winding up

What are various circumstances under which company can be wound up by the Tribunal?

Petition for winding up of a company can be filed under Section 272 of the Companies Act by a Company, Contributors, Creditors, the ROC, the Central or state government, or any other person in case if:

  • When a Tribunal is of view that it is just and fair to wound up a company;
  • If the company has become insolvent and is unable to pay its debts;
  • If the majority of member are of view that and passed a special resolution to dissolve the company;
  • If the company has done something which is against the sovereignty and interest of country or has spoiled any relations with foreign countries;
  • If company has not filed financial statements with Registrar of Companies from last few consecutive years
  • If the Tribunal has directed winding up of the company under Chapter XIX of the Companies Act, 2013.
  • If company is conducting affairs of company for fraudulent or unlawful purposes or the members who formed company are found to be guilty of fraud, misfeasance or misconduct.

The tribunal has power to either dismiss the petition or impose a cost or can pass a interim order, or can appoint a liquidator to take care of its activities during pendency of winding up petition or till the final dissolution of the company.

What are the services Lawyerinc offers for Winding up of Company?

Our services:

Our comprehensive range of end-to-end solutions includes following:

  • End to end services for Winding up of Company.
  • We have expertise in getting company winding up.
  • We will get in touch with you through renounced lawyers in this field.
  • Our Experts shall guide you through the procedure and supply you with a detailed checklist of the required documents.
  • We shall verify the documents you provide.
  • We will draft and file a petition for Winding up of Company.
  • Free consultation for any enquiry that you may have about Winding up.
  • You will get your Winding up of Company done without any hassles.

*Any fee, stamp duty and miscellaneous charges shall be payable extra.

Do contact us in case of any query related Winding up of Company and much more.

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How Voluntary Winding Up can be done?

The voluntary winding up can be done by Passing a Special resolution by the members of the company if:

  • the purpose of incorporating the company has been fulfilled as mentioned in articles of incorporation; or
  • on expiry of its duration as from period of incorporation
  • Members can go for voluntary winding up when the company is solvent and is efficient to pay its debts in full and it is not obligatory for the company to consult its creditors.

Is there any prior requirement for filing a Voluntary winding up petition?

The directors of the company are required to make a Declaration that the company is solvent within 5 weeks preceding the date of passing the resolution for winding up and that declaration need to be accompanied by a statement of assets and liabilities till date with Auditor’s report that reflects that the company has no pending dues till date or have paid the entire dues and the company is not wound up in any fraudulent way. This declaration needs to be submitted with the Registrar of Companies.

What are various steps for voluntary winding up of company?

  • Step-1: General Meeting: The board of directors of the company is required to conduct a Board Meeting in order to make a declaration. Directors are required to make a Declaration that the company is solvent there are no pending dues till date or company has paid the entire dues. It also needs to declare that the company is not wound up in any fraudulent way.
  • Step-2: Fixing of date: The board of directors are required to fix date, time and place for conducting the general meeting.
  • Step-3: Issuance of Notice: The board of directors is required to issue notice for calling general meeting once the date and timing is fixed.
  • Step-4: Special Resolution: All the members and creditors are required to pass a special resolution in order to wind up the company. If 2/3rd members are of the opinion that in the interest of all the parties it is required to wind up the company, then the company could be wound up voluntarily. If not the case then company need to file application before tribunal.
  • Step-5: Notice of Resolution: Company need to file a notice of resolution with Registrar of Companies within 10 days of passing of special resolution.
  • Step-6: Publication in newspaper: Company need to publish the notice within 14 days of passing resolution in leading newspaper circulated where the registered office of the company is situated.
  • Step-7: Filing of certified copies: Company is required to file certified copies of Special resolution passed in general meeting within 30 days.
  • Step-8: Liquidator Account: Company is required to prepare the Liquidators account and get it audited.
  • Step-9: Final Board Meeting: Company is required to call for final general meeting and pass a special resolution for disposal of books of account of the company to be wound up.
  • Step-10: Application before Tribunal: Company needs to file application before Tribunal within 2 weeks of final general meeting along with the copy of account statement.
  • Step-11: Final order: If the tribunal is satisfied with the documents submitted and all compliances have been done, tribunal may pass the order for dissolution of such company within 60 days of filing of an application.
  • Step-12: Record with ROC: The company liquidator shall file a copy of order to the Registrar of Companies.
  • Step-13: Publication in newspaper: The Registrar of Companies shall publish a notice in the official gazette in regards to the dissolution of the company.

Frequently Asked Questions

  • 1. Do I need lawyer during Winding up process?

    Winding up is a legally complex process that requires proper due diligence of company and negotiation of a share purchase agreement, So in order to minimize the risk it is advised to hire an attorney.

  • 2. Why to get Winding up of company done through lawyerinc?

    Lawyerinc is a complete blend of professionals from across the globe. In –house team of lawyers and attorneys, CA, CS. All professional work together in Lawyerinc, providing you end to end solution. It guarantees delivery in the shortest and most reasonable rate in India. It enjoys a global presence.

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