Winding Up a Company
Winding up is the process of selling all the assets of a business, paying off creditors, distributing any remaining assets to the partners or shareholders and then dissolving the business. Winding up can refer to such a process either for a corporation or for a partnership.
The winding up of a corporation is a legal process that is regulated by corporate laws as well as a company's articles of association (or a partnership agreement in the case of a partnership). Winding up can be compulsory or voluntary and can apply to both public and private corporations and partnerships.
Documents required for Winding up a company:- (All copies of documents should be self attested by the customer)
The audited Balance Sheet and Profit & Loss Account commencing from the date of last audited balance sheet and profit and loss account and ending with the latest practicable date before the date of declaration.
A statement of the Company’s Assets and Liabilities as at that date
A copy of the report of the Auditors of the Company on the above two documents.
Form No. 57 in duplicate, duly verified by affidavit in Form No. 58
Form No. 151 & 152 is to be submitted by Liquidator declaring his appointment
The process for Winding up a company:
Step 1: Convene a Board Meeting with two Director or by a majority of Directors. Pass a resolution with a declaration by the Directors that they have made an enquiry into the affairs of the Company and that, having done so, they have formed the opinion that the company has no debts or that it will be able to pay its debts in full from the proceeds of the assets sold in voluntary winding up of the company. Also, fix a date, place, time agenda for a General Meeting of the Company after five weeks of this Board Meeting.
Step 2:Issue notices in writing calling for the General Meeting of the Company proposing the resolutions, with a suitable explanatory statement.
Step 3:In the General Meeting, pass the ordinary resolution for winding up of the company by an ordinary majority or special resolution by 3/4 majority. The winding up of the company shall commence from the date of passing of this resolution.
Step 4:On the same day or the next day of the passing of a resolution of winding up of the Company, conduct a meeting of the Creditors. If two thirds in value of creditors of the company are of the opinion that it is in the interest of all parties to wind up the company, then the company can be wound up voluntarily. If the company cannot meet all its liabilities on winding up, then the Company must be wound up by a Tribunal.
Step 5:Within 10 days of the passing of a resolution for winding up of a company, file a notice with the Registrar for an appointment of the liquidator.
Step 6:Within 14 days of the passing of a resolution for winding up of a company, give a notice of the resolution in the Official Gazette and also advertise in a newspaper with circulation in the district where the registered office is present.
Step 7:Within 30 days of General Meeting for winding up of a company, file certified copies of the ordinary or special resolution passed in the General Meeting for winding up of the company.
Step 8:Wind up affairs of the company and prepare the liquidators to account of the winding up of the company and get the same audited.
Step 9:Call for final General Meeting of the Company.
Step 10:Pass a special resolution for disposal of the books and papers of the company when the affairs of the company are completely wound up and it is about to be dissolved.
Step 11:Within two weeks of final General Meeting of the Company, file a copy of the accounts and file an application to the Tribunal for passing an order for dissolution of the company.
Step 12:If the Tribunal is satisfied, the Tribunal shall pass an order dissolving the company within 60 days of receiving the application.
Step 13:The company liquidator would then file a copy of the order with the Registrar.
Step 14:The Registrar, on receiving the copy of the order passed by the Tribunal then publish a notice in the Official Gazette that the company is dissolved.