The company’s shareholders can initiate voluntary winding-up of a company at any time. The outstanding debt must be paid if there are any secured or unsecured creditors or staff on-roll. When all debts have been paid the company’s bank accounts will be locked. Finally, the organization must control any overdue enforcement such as income tax returns or annual filing and surrender the registration of GST. When all operations are stopped and the licenses are surrendered, the petition may be lodged with the Ministry of Corporate Affairs for the winding-up procedure.
FileRabbit will help you quickly and easily wind up your business. FileRabbit will help you start the process of winding up within 10 to 14 business days. The entire process for winding up a business may be completed within 3 to 6 months, subject to processing times by the government. The timeline for winding up a company, based on unique circumstances, could also differ from case to case. Stay in touch with a FileRabbit Adviser to learn more about winding up a company.
Winding up of a Company by Tribunal:
For a variety of factors, including business termination, loss, bankruptcy, the death of promoters, etc., it may be necessary to wind up a company. The process for winding up a company can be undertaken voluntarily by shareholders or creditors or by a tribunal.
As per the Companies Act 2013, a company can be wound up by a Tribunal, if:
- The company is unable to pay its debts.
- The company has by special resolution resolved that the company be wound up by the Tribunal.
- The company has acted against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign states, public order, decency, or morality.
- The Tribunal has ordered the winding up of the company under Chapter XIX.
- If the company has not filed financial statements or annual returns for the preceding five consecutive financial years.
- If the Tribunal believes that it is just and equitable that be company should be wound up.
- If the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purposes or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance, or misconduct in connection therewith and it is proper that the company be wound up.
Voluntary Winding-up of a Company:
The winding-up of a company can also be done voluntarily by the members of the Company, if:
- If the company passes a special resolution for winding up of Company.
- The company in general meeting passes a resolution requiring the company to be wound up voluntarily as a result of the expiry of the period of its duration, if any, fixed by its articles of association or on the occurrence of any event in respect of which the articles of association provide that the company should be dissolved.
Reasons to Winding up of a Company:
A company is a legal entity and a juristic person established created under the Companies Act. Therefore, a company is required to maintain regular compliance throughout its lifecycle. The winding-up process can be to close a company that is not active and avoid compliance responsibilities.
Fast to Close
A company can also be closed by applying with the MCA in about 3 to 6 months. The entire process can be completed online. Hence, the process for closing a company is fast and easy in India through IndiaFilings.
A company that doesn’t file its compliance on time incurs fines and penalty including debarment of the Directors from starting another Company. Hence, it is better to officially wind up an inactive company and avoid potential fines or liabilities in the future.
When compared to maintaining compliance for a dormant company, it might be cheaper to wind up a company and incorporate again when the time is right. IndiaFilings can help you wind up a company starting from just Rs.29899 all-inclusive fee.
Easy to Close
A company with minimal or no activities that have maintained proper compliance can be closed very easily in India. If any compliance is overdue, the compliance must first be regularised and registrations surrendered to close the company.