Closing a company

This query is : Resolved

Guest

Guest (Querist)

13 June 2013 Dear Experts

I want to know the procedures to close a company

* How much it costs
* which forms to be submitted

thanks and regards

Ajay Mishra

Ajay Mishra (Expert)
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16 June 2013 Hi

I will suggest you to concern a professional consultant, they will help you to brief the same on it.

Guest

Guest (Querist)

17 June 2013 Okay Sir ,

But can you brief me thereon?

Ajay Mishra

Ajay Mishra (Expert)
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17 June 2013
1. Winding up:

Companies registered under the Act may put an end to their affairs by winding up their business. This is carried out by realisation of the assets and applying the proceeds in payment of its debts and liabilities and if there is any balance left after meeting the liabilities, the same is paid back to the members in proportion to the contribution made by them to the capital of the company.

2. Meaning of winding up and dissolution

The terms "Winding up" and "Dissolution" are sometimes erroneously used to mean the same thing. However, they are quite different in their meanings. Winding up is a process whereby all assets of the company are realized and used to pay off the liabilities and members. Dissolution of the company takes place after the entire process of winding up is over. Dissolution puts an end to the life of the company. A dissolution order passed by the Court is like the Death Certificate of the company.

3. Modes of winding up of a company

Section 425 provides that a company may be wound up in the following ways:—
(a) by the Court/Tribunal, or;
(b) by the members voluntarily.

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Ajay Mishra

Ajay Mishra (Expert)
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17 June 2013
WINDING UP BY THE COURT/TRIBUNAL
Section 433 provides that a company may be wound up by the High Court/Tribunal,—
(a) if the company has by special resolution resolved that the company be wound up by the Court/Tribunal;
(b) if default is made in delivering the statutory report to the Registrar or in holding the statutory meeting;
(c) if the company does not commence its business within a year from its incorporation, or suspends its business for a whole year;
(d) if the number of members is reduced, in the case of a public company, below seven, and in the case of a private company, below two;
(e) if the company is unable to pay its debts;
(f) if the Court/Tribunal is of the opinion that it is just and equitable that the company should be wound up;
(g) if the company has made a default in filing with the Registrar, its balance sheet and profit and loss account or annual return for any five consecutive financial years;
(h) if the company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality;
(i) if the Court/Tribunal is of the opinion that the company should be wound up under the circumstances specified in section 424G:
Provided that the Court/Tribunal shall make an order for winding up of a company under clause (h) on an application made by the Central Government or State Government.

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Ajay Mishra

Ajay Mishra (Expert)
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17 June 2013
MEMBERS' VOLUNTARY WINDING UP

Circumstances in which voluntary winding up may be made
A company may be wound up voluntarily, in case—
(i) where a company is formed for undertaking a fixed object and the articles provide that the company is to be dissolved on the completion of the object, the company may be dissolved voluntarily where an ordinary resolution is passed at a general meeting;
(ii) where the proposal is approved by a special resolution passed at the general meeting of the company.

Ajay Mishra

Ajay Mishra (Expert)
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17 June 2013
WHO CAN FILE PETITION FOR WINDING UP
Section 439 provides that an application to the Court/Tribunal for the winding up of a company can be made:—
(a) by the company;
(b) by any creditor or creditors, including any contingent or prospective creditor or creditors;
(c) by any contributory or contributories;
(d) by all or any of the parties at (a), (b) and (c), whether together or separately;
(e) by the Registrar of Companies;
(f) by any person authorised by the Central Government as a result of investigation carried out on the affairs of a company pursuant to section 237;
(g) by the Central Government or a State Government, in a case falling under clause (h) of section 433.

Guest

Guest (Querist)

18 June 2013 Thanks sir and obliged

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