winding up

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Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2011 How to wind up a pvt ltd company not doing business from past 1 year, without the appointment of a liquidator?

parthasarthy naidu

parthasarthy naidu (Expert)
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19 February 2011 The company should avail the facility of easy exit scheme announced by the Government. In order to give an opportunity to the defunct companies for getting their names strike off from the register of companies, the Ministry of Corporate Affairs had launched a scheme, namely easy exit scheme 2010 under section 560 of the Companies Act, 1956. The scheme has come into force from 1st January,2011 and is still open to facilitate such companies to take the benefit of the scheme.

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Querist : Anonymous

Querist : Anonymous (Querist)

19 February 2011 But the co. does not fall under the category of Defunct companies.
Can it declare itself as a defunct company?

ADITI BIDASARIA

ADITI BIDASARIA (Expert)
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19 February 2011 As per Easy Exit Scheme, 2011,
“defunct company” means a company registered under the Companies Act, 1956 which is not carrying over any business activity or operation on or after the 1st April, 2008 and includes a company which has not raised its paid up capital as provided in sub sections (3) and (4) of section 3 of the Companies Act, 1956;

It means your Company does not fall under the aforesaid criteria of defunct Company and does not opt for the Easy Exit Scheme 2011.

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Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2011 Yes..as the company has discontinued its business from past 1 year, but the Easy Exit Scheme requires minimum 2 years.So it does not fall under this category.Is there any other easy way out?

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
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03 August 2025 Here’s the summary and options for winding up a private limited company not doing business for over 1 year, without appointing a liquidator, based on your details:

1. Easy Exit Scheme (Section 560, Companies Act, 1956)
Applicable only for defunct companies which have:

Not carried on any business since 1st April 2008 (or at least 2 years of inactivity), or

Have not raised their paid-up capital as required.

Your company does not qualify as “defunct” because it stopped business only 1 year ago, and the scheme requires at least 2 years.

So, Easy Exit Scheme is NOT an option now.

2. Normal Winding Up (Voluntary or Compulsory) under Companies Act
Voluntary winding up requires:

Passing a special resolution in the general meeting.

Appointment of a liquidator to oversee the winding up process.

Submission of documents to ROC, settlement of debts, distribution of assets.

Compulsory winding up is by the Tribunal (Court) on grounds such as inability to pay debts.

In both cases, appointment of a liquidator is mandatory as per law.

3. Strike Off Procedure under Companies Act, 2013 (if applicable)
The company can apply to the Registrar of Companies (ROC) to strike off the company under Section 248 of the Companies Act, 2013 if:

It has not carried on any business or operation for 2 years.

Has no pending liabilities.

This is an administrative closure and does not require a liquidator.

Since your company has stopped business for only 1 year, it’s not eligible yet.

4. What can you do now?
Wait until 2 years of inactivity to apply for strike off under Section 248 (if no liabilities).

Alternatively, opt for voluntary winding up with appointment of liquidator, which is the usual legal process.

If urgent closure needed, you must go for formal winding up with liquidator.

Summary:
Method Liquidator Required? Eligible Now? Comments
Easy Exit Scheme No No Needs 2 years inactivity, defunct co.
Voluntary Winding Up Yes Yes Usual method, formal process
Compulsory Winding Up Yes Possible Court driven, usually creditor initiated
Strike Off (Section 248) No No Needs 2 years inactivity, no liabilities

Bottom line:
If you want to wind up now without liquidator, it’s not possible under existing laws. You either wait for 2 years inactivity for ROC strike off or do voluntary winding up with liquidator.

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