Section 25 company
Suvarna (CS) (58 Points)
29 February 2016
Shashin
(Lawyer)
(58 Points)
Replied 29 February 2016
here it is
https://www.startbizindia.in/se25_dissolution_windingup.php
As per the Companies Act 1956, a company can close its operations and affairs by any of following methods:
Declaring the Company as Defunct
This is the most easy & shortest method for dissolving of any company. Where the company is carrying on any business or operation, it can make any application to the Registrar of Companies for declaring it as defunct company. After being declared as defunct, the name of the company is removed from the records of the Registrar of Companies. But before making an application to the Registrar of Companies, an application is required to made to Regional Director for revocation of licence granted and only, after when the licence as aforesaid is revoked , the Registrar of Companies can declare the company as defunct , subject to compliance of other conditions.
Though declaring a company as defunct is the suo moto, power of the Registrar of Companies, the Government of India from time to time issues necessary exit scheme, whereby non operational companies can apply to the Registrar of Companies for striking their names. Currently, a company can apply under Simplified Exit Scheme 2005 for striking off their name.
Striking off the name of the company does not materially affect the creditors of the company because such creditors may:
For declaring a company defunct, the company is required to file an application to the Registrar of company supported by affidavit of Directors and balance sheet carrying NIL assets and liabilities. The whole process of striking off takes around 3-4 months.
Wounding up the Company
Wounding up is the process to bring an end to the life of the company, whereby all the affairs and operations of the company are closed. After completion of the process of winding up, the company is dissolved and its name is removed from the records of the Registrar of Companies. A company may be wound up voluntarily on its own or mandatorily by the High Court. The winding up route is adopted when the Company is several years of existence and has been carrying operations. But before starting the process of winding up, the company needs to make an application to the Regional Director for revocation of licence and only after revocation of licence, the winding up process can be started
By voluntary winding
A company can be voluntarily wound-up:
Winding up by the order of the Court
A company shall be mandatorily wound up by Hon’ble High court
In the winding up process, the an application is made to High Court for winding up, who appoints a liquidator for winding up the affairs of the Company, the liquidator distributes the assets of the company for paying the up dues of the company in accordance with prescribed procedure and ultimately after satisfying all the liabilities of the company, the surplus if any is distributed among the shareholders . Winding up is time consuming exercise as compared to declaring the company as defunct and take around 7-8 months to complete the process, lots of formalities are required to be undertaken for completing the winding up process.
ACS Parul Rawat
(Entrepreneur | Corporate Law Advisor | Lawyer in Making | AIR-8)
(218 Points)
Replied 01 March 2016
@ Ms. Suvarna You can also close the Company under Fast Track Exit (FTE) process.
Suvarna
(CS)
(58 Points)
Replied 02 March 2016
Dear Parul,
Thank you for reply. but FTE is not applicable to Section 8/25 Company.
Suvarna
(CS)
(58 Points)
Replied 02 March 2016
Dear Shashin,
Thank you so much for exaplaning closure procedure.
ACS Parul Rawat
(Entrepreneur | Corporate Law Advisor | Lawyer in Making | AIR-8)
(218 Points)
Replied 02 March 2016
@ Ms.Suvarna OK! Thanx i was unaware regarding this! :)
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