Winding up
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 February 2015
What are the rule and procedures for voluntary winding up of a private limited company which has no transaction for the last few years? Which act should be followed copanies act, 1956 or 2013? Also please provide format of resolutions to be passed.
13 February 2015
The companies Act,1956 (section 484 or 560) has to be followed . If 484 is opted ,follow rules and forms of Companies (Court Rules)1959 except GNL-2 of 2013 act. If 560 is opted, follow FTE scheme.
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Querist : Anonymous
Querist :
Anonymous
(Querist)
13 February 2015
Sir
Is there any circular or notifications regarding the same.
Is there any circular or notifications regarding the same.
03 August 2025
Here’s a clear overview for voluntary winding up of a private limited company with no transactions for years, based on your question from 2015:
1. Applicable Law: Companies Act, 1956 or 2013?
For companies incorporated before 1st April 2014, winding up is generally governed by the Companies Act, 1956, especially if the process started before the 2013 Act fully came into force.
Under Section 484 or Section 560 of the Companies Act, 1956, voluntary winding up can be initiated.
The Fast Track Exit (FTE) scheme under Section 560 provides an easier winding up option for companies with no pending liabilities.
If the company is incorporated after 1st April 2014 or wishes to follow the latest laws, the Companies Act, 2013 and its relevant sections (such as Section 304 to 321) will apply.
In practice, many companies still use the 1956 Act procedures or FTE scheme for voluntary winding up of inactive companies.
2. Voluntary Winding Up Options under Companies Act, 1956
Section 484 — Voluntary winding up by members (if company is solvent).
Section 560 — Fast Track Exit scheme (for defunct companies with no assets/liabilities).
FTE scheme is a simplified route with fewer formalities and lower costs.
3. Key Procedures under Section 484
Hold a Board Meeting to pass resolution recommending voluntary winding up.
Convene a General Meeting of shareholders to pass a special resolution for winding up.
Appoint a Liquidator (usually a Chartered Accountant or Company Secretary).
File the special resolution and related documents with the Registrar of Companies (ROC).
Liquidator will settle liabilities (if any), realize assets, and distribute remaining assets.
Liquidator files final accounts and a report with ROC.
ROC strikes off company from the register after satisfaction.
4. Fast Track Exit (FTE) under Section 560
Applicable to companies that have:
Not commenced business or
Not carried out any business for the last 1 year or more.
No outstanding liabilities.
Apply to ROC with prescribed documents.
If ROC is satisfied, company name is struck off without a liquidator.
5. Sample Resolution Formats
Board Resolution (to recommend winding up):
"Resolved that pursuant to the provisions of Section 484 of the Companies Act, 1956, the Board of Directors hereby recommends that the company be wound up voluntarily."
Special Resolution in General Meeting (to pass winding up):
"Resolved as a Special Resolution that the company be wound up voluntarily pursuant to the provisions of Section 484 of the Companies Act, 1956 and [Name of Liquidator] be and is hereby appointed as Liquidator for the purpose of such winding up."
6. Circulars and Notifications
MCA Circulars related to Fast Track Exit Scheme and winding up can be found on MCA website.
The Fast Track Exit Scheme, 2011 (under Section 560) guidelines and FAQs are available there.
For up-to-date rules, you may check notifications related to winding up on MCA site or consult a professional for the latest.
1. Applicable Law: Companies Act, 1956 or 2013?
For companies incorporated before 1st April 2014, winding up is generally governed by the Companies Act, 1956, especially if the process started before the 2013 Act fully came into force.
Under Section 484 or Section 560 of the Companies Act, 1956, voluntary winding up can be initiated.
The Fast Track Exit (FTE) scheme under Section 560 provides an easier winding up option for companies with no pending liabilities.
If the company is incorporated after 1st April 2014 or wishes to follow the latest laws, the Companies Act, 2013 and its relevant sections (such as Section 304 to 321) will apply.
In practice, many companies still use the 1956 Act procedures or FTE scheme for voluntary winding up of inactive companies.
2. Voluntary Winding Up Options under Companies Act, 1956
Section 484 — Voluntary winding up by members (if company is solvent).
Section 560 — Fast Track Exit scheme (for defunct companies with no assets/liabilities).
FTE scheme is a simplified route with fewer formalities and lower costs.
3. Key Procedures under Section 484
Hold a Board Meeting to pass resolution recommending voluntary winding up.
Convene a General Meeting of shareholders to pass a special resolution for winding up.
Appoint a Liquidator (usually a Chartered Accountant or Company Secretary).
File the special resolution and related documents with the Registrar of Companies (ROC).
Liquidator will settle liabilities (if any), realize assets, and distribute remaining assets.
Liquidator files final accounts and a report with ROC.
ROC strikes off company from the register after satisfaction.
4. Fast Track Exit (FTE) under Section 560
Applicable to companies that have:
Not commenced business or
Not carried out any business for the last 1 year or more.
No outstanding liabilities.
Apply to ROC with prescribed documents.
If ROC is satisfied, company name is struck off without a liquidator.
5. Sample Resolution Formats
Board Resolution (to recommend winding up):
"Resolved that pursuant to the provisions of Section 484 of the Companies Act, 1956, the Board of Directors hereby recommends that the company be wound up voluntarily."
Special Resolution in General Meeting (to pass winding up):
"Resolved as a Special Resolution that the company be wound up voluntarily pursuant to the provisions of Section 484 of the Companies Act, 1956 and [Name of Liquidator] be and is hereby appointed as Liquidator for the purpose of such winding up."
6. Circulars and Notifications
MCA Circulars related to Fast Track Exit Scheme and winding up can be found on MCA website.
The Fast Track Exit Scheme, 2011 (under Section 560) guidelines and FAQs are available there.
For up-to-date rules, you may check notifications related to winding up on MCA site or consult a professional for the latest.
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