Winding up of a Company
Are you planning to dissolve your company?
Possible Reasons-
- No business being carried out since incorporation.
- Incurred huge loss in the business.
- Business is on the brink of collapse.
- Debt piled up.
- Others
Liquidation of a Company-
Simply put, Liquidation or winding up is a legal term and refers to the procedure through which the affairs of a company are wound up by law. A company is the creation of law, it cannot die itself as an natural death. So it comes to its end by law through the process of liquidation. The Liquidation or winding up is a process through which life of company and it’s all affairs are wound up and its properties are administered for benefits of its creditors and members. The company can sell its assets to meet obligations and repay liabilities. If a company is liquidated due to bankruptcy then an administrator, who is called liquidator, is appoint to take control of company, collect its assets, pay its debts and finally if any surplus assets are left, they are divided among the members of the company in proportion to their rights under the articles.
Winding up of a private limited company can be done in 2 different ways-
- Voluntary wind up: Voluntary wind up can be commenced either by special resolution or a resolution taken during a general body meeting.
- Compulsory wind up: The compulsory winding up of a company can be executed upon the order of a tribunal or a court.
Required Documents-
- PAN card of the company.
- Certificate of closure of the company’s bank account.
- An indemnity bond, which should be notarized by the directors.
- Latest statement of company accounts.
- Statement of accounts related to all assets and liabilities of the company, audited by a chartered accountant (CA).
- Proof of approval of the resolution by 3/4th of the board members.
- Application for removing the name of the company.
Procedure-
- NOC should be obtained from the Income Tax Department.
- Board meetings should be convened for the approval of winding up a company.
- Appoint an official liquidator or insolvency professional.
- Before initiating a wind-up process, an intimation should be conveyed to the Insolvency and Bankruptcy Board of India (IBBI) within 7 days from the date of approval of the resolution.
- An announcement should be made to the public within 14 days of passing the wind-up resolution in an official gazette, one english newspaper and one local newspaper, where the registered company is located.
- The whole winding up process should be completed within 12 months from the initiation of the liquidation.
Feel free to contact our experts for Liquidation of company.
