Winding up company -

Winding up Company

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OVERVIEW

A private limited company is an artificial judicial person and requires various compliances like the appointment of Auditor, regular filing of income tax return, annual return filing, and more. Failing to maintain compliance for a Company could result in fines and disqualification of the Directors from incorporating another Company. Therefore, if a private limited company has become inactive and there are no transactions in the company, then it is best to wind up the Company.

Voluntary winding up of a company can be initiated at any time by the shareholders of the company. In case there are any secured or unsecured creditors or employee’s on-roll, the outstanding dues must be settled. Once all the dues are settled, the bank accounts of the company must be closed. Finally, the company must regularise any overdue compliance like an income tax return or annual filing and surrender the GST registration. Once, all activities are stopped, and the registrations are surrendered, the winding up application petition can be filed with the Ministry of Corporate Affairs.Parakh Management Services Pvt.Ltd. (PMSPL) can help you wind up your Company, quickly and easily. PMSPL can help you initiate the winding up process within 10 to 15 Working days.

COMPULSORY WINDING UP

There are certain grounds upon which a company can be wound up compulsorily. A company’s inability to pay its debts is a common ground for presenting an originating Summons for compulsory winding up. A company is deemed to be unable to pay its debts if: A creditor having a claim against the company for more than Rs. 10,000.00 has served a written demand requiring payment, and the debt is not paid within three weeks. Execution of a judgment obtained by a creditor against a company remains unsatisfied in part or in whole; or it is proved to the Court’s satisfaction that the company is unable to pay its debts.

The following parties can file an Originating Summons to wind up a company compulsorily:

1. The company itself.

2. A creditor of the company.

3. A shareholder of the company.

4. A liquidator.

5. A judicial manager.

6. Various Ministers on grounds specified under the law.

Voluntary Winding Up

Usually, a voluntary winding up is effected by the passing of a special resolution by the members of the company. The winding up commences at the time of passing the resolution.

Members’ Voluntary Winding Up
Creditors’ Voluntary Winding Up

From the commencement of winding up, the company shall cease to carry on its business. However, the corporate powers of the company shall continue until the company is dissolved. The company’s shareholders cannot transfer their shares in the company without the sanction of the liquidator.