Pvt company dissolution

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vilas yeole (Querist)
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29 June 2013 can any one tell me we want to dissolve our pvt company we have plot, machinery and building,office etc and want to divide between two director by putting wall in plot and changing the name of ownership plz tell me what all things we have to do

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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29 June 2013 A company can be liquidated by obtaining the orders from the court and takes sufficient time. For this you have to take guidance from a professional CA or CS.
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Meantime it is possible that the directors may come to a better solution.
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vilas yeole

vilas yeole (Querist)
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01 July 2013 how much they will charge it is a small business.charge for liquidation and taking matter to court will be how much.plz give me idea so tat we instead of liquidation we can
settle the issue internally.

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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10 August 2024 Dissolving a Private Limited Company involves several legal and procedural steps, especially when assets such as plots, machinery, and buildings are involved. Here’s a detailed guide on the process, including how to handle the division of assets and the potential costs:

### **1. Steps for Dissolution**

#### **1.1. Board Resolution**
- **Resolution for Dissolution:** The first step is to pass a board resolution in a board meeting to initiate the dissolution process.

#### **1.2. Shareholder Approval**
- **Special Resolution:** A special resolution must be passed by the shareholders in a general meeting approving the dissolution of the company.

#### **1.3. Settling Liabilities**
- **Clear All Dues:** Ensure all liabilities, including debts, taxes, and other obligations, are settled. Obtain a "No Dues Certificate" from creditors if needed.

#### **1.4. File for Voluntary Winding-Up**
- **Form Submission:** File the necessary forms with the Registrar of Companies (RoC) for voluntary winding-up. These include:
- **Form MGT-14:** For passing a special resolution.
- **Form STK-2:** For the application of striking off.
- **Affidavit and Declaration:** Submit an affidavit and declaration confirming that all dues are cleared and the company has no pending liabilities.

#### **1.5. Asset Division**
- **Valuation of Assets:** Get the assets valued by a professional.
- **Division Agreement:** Draft an agreement for the division of assets between the directors, including the plot, machinery, and building.
- **Transfer of Assets:** Execute necessary documents to transfer ownership of the assets. This may involve:
- **Property Transfer Deeds:** For land and buildings.
- **Bills of Sale:** For machinery and office equipment.

#### **1.6. Tax and Legal Compliance**
- **Tax Filing:** File final tax returns and address any tax liabilities.
- **Obtain Clearances:** Obtain clearances from the tax authorities.

#### **1.7. Filing Final Documents**
- **File Final Returns:** Submit the final returns with RoC and request the dissolution of the company.
- **Publication:** Publish a notice of dissolution in the official gazette and local newspapers as required.

### **2. Costs Involved**

#### **2.1. Legal and Professional Fees**
- **Company Secretary/Legal Fees:** Professional fees for handling the dissolution, asset division, and legal paperwork can range from INR 20,000 to INR 50,000, depending on the complexity of the case and the professional’s charges.
- **Valuation Fees:** Fees for asset valuation by a chartered accountant or valuation expert.

#### **2.2. Government Fees**
- **Registrar of Companies (RoC) Fees:** Filing fees for various forms (Form MGT-14, STK-2, etc.) typically range from INR 2,000 to INR 5,000.
- **Publication Costs:** Costs for publishing notices in newspapers.

#### **2.3. Taxation**
- **Capital Gains Tax:** If there is any capital gain on the sale or transfer of assets, it will be subject to tax.

### **3. Settling Internally vs. Liquidation**

#### **3.1. Internal Settlement**
- **Advantages:** Generally quicker and less costly if all parties agree on the division and there are no outstanding liabilities.
- **Disadvantages:** Requires mutual consent and proper documentation to ensure legality and avoid future disputes.

#### **3.2. Liquidation**
- **Advantages:** Provides a formal legal process with oversight, ensuring all obligations are met and the process is legally sound.
- **Disadvantages:** More time-consuming and costly due to professional fees and compliance requirements.

### **4. Recommendations**

- **Consult a Professional:** Engage a company secretary or legal advisor to handle the dissolution process and ensure all legal requirements are met.
- **Asset Division Agreement:** Draft a clear and legally binding agreement for the division of assets.
- **Evaluate Costs:** Compare the costs of liquidation with internal settlement and choose the most feasible option.

By following these steps, you can effectively dissolve the company and manage the division of assets. Consulting with professionals will help ensure compliance with all legal and regulatory requirements and avoid potential issues in the future.

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