Procedure For Voluntary Winding up of a Company In India

Procedure For Voluntary Winding up of a Company In India

January 12, 2017
     
Procedure-Voluntary-Winding-up-Company-In-India

Voluntary winding up means winding up of the company by the members or the creditors without interference by the Tribunal. The following are the conditions for voluntary winding up of a company under section 304 of the Companies Act, 2013:

(1) Expiry of duration or happening of event

If the duration of the company fixed by the articles has expired or the event, if any, on the occurrence of which the Articles provide to dissolve the company.

(2) Passing of special resolution

When the special resolution has been passed that the company be wound up voluntarily.

Types of Voluntary Winding up

The voluntary winding up of a company may be classified into the following two parts:

(a)  Members’ voluntary winding up : A members’ voluntary winding up is possible only in case when the Company is solvent.

(b)  Creditors’ voluntary winding up : Section 306(3) provides that where two-thirds in value of creditors of the company are of the opinion that the company may not be able to pay for its debts in full from the proceeds of assets sold in voluntary winding up and pass a resolution that it shall be in the interest of all parties if the company is wound up by the Tribunal, the company shall within fourteen days thereafter file an application before the Tribunal.

Procedure For Voluntary Winding up of a Company In India


1.    Convene a Board Meeting with two Director or by a majority of Directors. Pass a resolution with a declaration by the Directors that they have made an enquiry into the affairs of the Company and that, having done so, they have formed the opinion that the company has no debts or that it will be able to pay its debts in full from the proceeds of the assets sold in voluntary winding up of the company. Also, fix a date, place, time agenda for a General Meeting of the Company after five weeks of this Board Meeting.
2.    Issue notices in writing calling for the General Meeting of the Company proposing the resolutions, with a suitable explanatory statement.
3.   In the General Meeting, pass the ordinary resolution for winding up of the company by ordinary majority or special resolution by 3/4 majority. The winding up of the company shall commence from the date of passing of this resolution.
4.   On the same day or the next day of passing of resolution of winding up of the Company, conduct a meeting of the Creditors. If two thirds in value of creditors of the company are of the opinion that it is in the interest of all parties to wind up the company, then the company can be wound up voluntarily. If the company cannot meet all its liabilities on winding up, then the Company must be wound up by a Tribunal.
5.    Within 10 days of passing of resolution for winding up of company, file a notice with the Registrar for appointment of liquidator.
6.    Within 14 days of passing of resolution for winding up of company, give a notice of the resolution in the Official Gazette and also advertise in a newspaper with circulation in the district where the registered office is present.
7.    Within 30 days of General Meeting for winding up of company, file certified copies of the ordinary or special resolution passed in the General Meeting for winding up of the company.
8.    Wind up affairs of the company and prepare the liquidators account of the winding up of the company and get the same audited.
9.     Call for final General Meeting of the Company.
10.   Pass a special resolution for disposal of the books and papers of the company when the  affairs of the company are completely wound up and it is about to be dissolved.
11.   Within two weeks of final General Meeting of the Company, file a copy of the accounts and file and application to the Tribunal for passing an order for dissolution of the company.
12.   If the Tribunal is satisfied, the Tribunal shall pass an order dissolving the company within 60 days of receiving the application.
13.   The company liquidator would then file a copy of the order with the Registrar.
14.  The Registrar, on receiving the copy of the order passed by the Tribunal then publish  a notice in the Official Gazette that the company is dissolved.

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