How to Wind up of a Private Limited Company in India - PowerPoint PPT Presentation

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How to Wind up of a Private Limited Company in India

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Winding up a private limited company is possible in a couple of ways in India. A closure is enforced when the business entity fails to comply with plenty of necessary compliances. So, if a company is not able to carry out its business operations for a considerable period of time and does not expect it to revive shortly, then it is better to close that firm and avoid penalties resulting from non-compliance. – PowerPoint PPT presentation

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Title: How to Wind up of a Private Limited Company in India


1
How to Wind up of a Private Limited Company in
India
  • Winding up a private limited company is possible
    in a couple of ways in India. A closure is
    enforced when the business entity fails to comply
    with plenty of necessary compliances. So, if a
    company is not able to carry out its business
    operations for a considerable period of time and
    does not expect it to revive shortly, then it is
    better to close that firm and avoid penalties
    resulting from non-compliance.
  • What are the Different Ways of Winding up a
    Private Limited Company There are a variety of
    procedures for winding up a Pvt Ltd company.
  • Compulsory winding up of a company
  • Voluntary Winding Up of a Company
  • 3. Fast Track Exit Scheme (FTE)
  • 1) Compulsory Winding Up of a Company

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  • Tribunal is completely responsible for this sort
    of closing up. Some of the key reasons for the
    same are listed below.
  • Unpaid debts of company
  • Unlawful act by a company or the company's
    management
  • A special resolution passed for closing up
  • Default in filing a yearly return or financial
    statements with the ROC or the registrar of
    companies for five consecutive years.
  • Tribunal is of the view that the company must
    close up. Some of the key steps that are
    involved in closing up a private limited company
    in India by tribunal
  • Step 1 The company owner must file a petition to
    the tribunal and affix the company's statement
    of affairs along with that.
  • Step 2 The tribunal will either accept or reject
    it in receiving the application for closing and
    petition. There by. Pass an order within 90 days
    from the date of petitions receipt.
  • Step 3 If someone files the petition other than
    the company, the tribunal has the authority to
    dismiss the application.
  • Step 4 If the tribunal thinks that your company
    must go for closing up after an extensive
    assessment, then it must pass an order to you to
    file the objection with a statement of affairs
    within 40 days.
  • Step 5 Now, the tribunal will appoint a
    liquidator to carry out the closing process of
    your company. He or she will take his or her
    course of action, so examine the books of
    accounts, review the sale of assets and do other
    financial functions. The liquidator will prepare
    a draft report for the approval of the closing
    up committee.

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  • Step.6 The liquidator will submit its final
    report to the tribunal to pass an order of
    closing up the company once the committee
    approves the draft report.
  • Step 7 The liquidator will forward a copy of the
    order to the ROC within 30 days. If he or she
    fails to do so, then it will lead to a big
    penalty.
  • Step 8 The ROC will approve the winding up of
    the company after complete satisfaction. The
    registrar will strike the name of the company
    from the ROC and send a notice in the official
    gazette of India for publication.
  • Voluntary Winding Up of a Company
  • It happens under two circumstances-1) Company
    passes a resolution in general meeting after
    expiry of duration for which it is formed or on
    when an event mentioned in AOA (Articles of
    Association) happens. 2) Company passes special
    resolution for voluntary closing up of the
    company.
  • Here are some key steps involved in private
    limited company winding up process
  • The company passes a resolution in the general
    meeting and majority of directors agree for the
    closing up.
  • If the company gets closed up, consent of trade
    creditors approving that they don't have any
    obligation.
  • The private business entity makes a declaration
    of solvency that shows the credibility of the
    company. It should be accepted by the trade
    creditors of the firm.
  • Appointment of the liquidator to carry out the
    closing up proceeding and prepare a report of
    the closing up on the assets, debts, properties
    and so on, be laid out prior to the general

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  • meeting of the company. The report is approved
    and resolution for dissolution of the company is
    passed in the general meetings.
  • Also, a copy of the final accounts of the company
    and resolution is sent to ROC by the company
    liquidator.
  • The liquidator of the company spies to the
    tribunal for an order of dissolution of the
    company. The tribunal will pass an order of
    dissolution within 60 days of the Application if
    satisfied with the closing up. The copy of the
    final order to be filled with the ROC. The
    closing of a private limited company is a
    multi-staged process and needs expert guidance.
    If you need legal competence in carrying out the
    closing procedure of the company, you must look
    no further than ExpertBells. They provide end to
    end assistance in winding up your business
    operations and complete the whole process with
    90 working days.
  • Fast Track Exit Scheme (FTE)
  • This is a fast process to close a company without
    adopting a lengthy procedure by passing a
    special resolution and applying to the high court
    and appointing a liquidator and so on. Also, it
    is a very expensive process that can't be
    affordable to small businesses and organizations.
  • Procedure for Compulsory Winding up of a Company
  • The application procedure to get the name of a
    company struck off under fast track exit is
    listed below.
  • Registration Company eligible to apply for
    closing off its name has to apply to the ROC in
    form FTE.
  • The FTE has to be filed electronically on the
    ministry of corporate affairs website by
    permitting ROC fee of Rs 5000.

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  • The ROC examines and provides notice to the
    company under section 560 )3) of the companies
    act, 1956 by email, mentioning 30 days unless
    the cause of showing to the contrary, its name be
    struck off from the registrar and the company
    will be dissolved.
  • The ROC includes the name of the applicants and
    the date of making the application under the
    scheme in the ministry of corporate affairs
    website and providing 30 days to raise objections
    if any by the stakeholders to the concerned
    registrar.
  • The ROC sends intimation of such companies that
    avails FTE mode to the office of the income tax
    department providing 30 days for their
    objection.
  • The ROC approves if satisfied and strikes its
    name off the register and sends a notice under
    section 560 of the companies act, 2956 for
    publication in the official gazette.
  • What Documents are Required?
  • The documents to file an application with a
    prescribed fee of Rs 5000 are mentioned below.
  • An affidavit
  • Copy of board resolution
  • Indemnity bond
  • Prerequisite
  • Statement of account
  • If you need any help related to company winding
    up, private limited company registration in
    India, etc, contact ExpertBells right now.
  • Kindly visit our other blogs to find step-by-step
    information on company registration online or
    Conversion of Private Limited Company into Public
    Limited Company.
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