Step by step instructions for voluntary windup

Step 1: A special resolution has to be passed by the Board and the members

Step 2: Within fourteen days of the passing of the resolution, a notice of the resolution by advertisement in the Official Gazette, and also in some newspaper circulating in the district where the registered office of the company is situated.(If default is made in complying with this clause, the company and every officer of the company who is in default shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.)

Step 3: The Business activities are to cease the day the resolution is passed.

Step 4: The directors have to make a declaration verified by an affidavit, that they have made a full inquiry into the affairs of the company, and that the company has no debts, or that it will be able to pay its debts in full within three years from the commencement of the winding up.

Step 5: The above declaration has to be made and submitted to the registrar within 5 weeks (35 days) of passing the resolution for winding up along with the auditor’s report for the most recent financial period.

Step 6: The members have to appoint a liquidator to distribute the assets and pay off the liabilities.

Step 7: The registrar has to be notified about the appointment (or resignation) of the liquidator in writing.

Step 8: If the dissolution takes more than a year, the liquidator is to hold a general meeting at the end of every year giving the report of the dissolution process and progress with accounts. The same is to be done even on the final meeting for dissolution.

Step 9: The minutes of these meetings should be submitted to the registrar as usual.

Thanks Veeralji, There are really helpful.

Do we have to call an EGOM or Board minutes are sufficient. If EGOM is to be called, is there any minimum % attendance requried?

Is there any cooling period / minimum period of operation to initiate a voluntary windup?

what are the qualifications needed for liquidator or are there any designated liquidators we can approach (like the notary public) ?

thanks once again.

Dear Guptaji,

1. An EGM will have to be mandatorily called after the Board Meeting. Unless the Articles of the company provide for a larger quorum, two members personally present shall constitute a valid quorum in an EGM, in case of a Private Limited Company.

2. There is no cooling off period provided in case of a Voluntary Winding up. The Business activities are to cease the day the resolution is passed. So, the decision to wind up should be taken after  due deliberation.

3. In case of voluntary winding up of companies, Section 490 of the Companies Act, 1956 empowers the company to appoint one or more liquidators in its general meeting. The Company may appoint a Practicing Company Secretary,  Practicing Chartered Accountant , or a Solicitor as a liquidator.

Regards,

Veeral Gandhi