Winding up a company voluntarily require long procedural compliance to follow. There are certain mandatory requirements which have to be completed to close down a company voluntarily. A company can be wound up voluntarily in the situations mentioned below:
– The company passes a resolution in its general meeting upon the expiry of the duration for which it is formed, or upon the occurrence of any event in respect of which the articles provide for its dissolution, or
– The company passes a special resolution (with approval of at least 3/4th of the shareholders) for a voluntary winding up of the company.
The voluntary winding-up commences from the date of passing of the resolutions mentioned above. The company should also appoint a Company liquidator in the same meeting. Such an appointment should also be confirmed by a majority of the creditors (in terms of value) of the company.
Procedure:-
- Company passes a resolution in their general meeting as mentioned above. However, the majority directors must agree for winding up.
- The consent of the Trade Creditors is also required to wind up the company. Trade Creditors has to give their approval that they don’t have any obligation if the company gets wound up.
- The Company has to make a Declaration of Solvency and the same must be accepted by the trade creditors of the company. The Company must show the Company’s credibility in Declaration of Solvency.
- The liquidator so appointed will carry out the winding-up proceedings and prepare a report of the winding-up on the assets, properties, debts and so on. The report shall be laid before the general meeting of the company for approval, and passing a resolution for dissolution of the company. The Company liquidator shall send a copy of the final accounts of the company and resolutions to the ROC
- The Company liquidator shall also make an application to the Tribunal for an order of dissolution of the company. Upon being satisfied with the winding up, the Tribunal shall pass an order of dissolution within 60 days of the application. A copy of the final order should be filed with the ROC.
All the above-mentioned procedures shall be presented and filed in a prescribed form and even after the company gets wound up then also company’s name shall be prohibited for 2 years to be taken by any other applicant.
The format for various forms and detailed procedure for winding up is prescribed in Companies (Winding up) Rules, 2020.
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