Winding Up Company

Modes Of Winding Up A Company

1 Winding up of a company by the tribunal
2 Voluntarily winding up of a company by its members

Winding Up Of Company By A Tribunal

A company starts winding up its business after getting the order from the tribunal. It is also known as
compulsory winding up of a company. In this case, court gives orders to the company to appoint a liquidator
who takes control of the company, collect its assets, pay off the debts & distribute the profit among the
members as per their rights.

Reasons For Company Wounded By A Tribunal

According to the companies act 2013, company can be wind up by a tribunal if –
Modes Of Winding Up A Company

1 Winding up of a company by the tribunal
2 Voluntarily winding up of a company by its members

Winding Up Of Company By A Tribunal
Reasons For Company Wounded By A Tribunal
 Company is unable to pay its debts
 Tribunal ordered the company to wind up under chapter XIX
 Company has acted against the interest of sovereignty & integrity of India, state security, public order,
friendly relations with foreign states, decency or morality etc.
The company has not filed annual returns or financial
 statements from the last 5 consecutive years.
 Tribunal opinion is just that the company should be wound up.
 The company has by special resolution resolved that the company be wound up by the tribunal.
 The company catches doing fraudulent or unlawful activities or the persons working in the company
found guilty of fraud or misconduct

Voluntary Winding Up Of A Company
Voluntary winding up of company means wounding up of a company by its members voluntarily. Winding up
of a company can be done voluntarily by the members of the company, if –
 The company passes a special resolution to wind up the company
The company passes a resolution in the general meeting to wind up voluntarily as a result of the
expiry of the period of its duration as per articles of association or any event occurred with respect
of which articles of association declares that the company should be dissolved.

Procedure Of Voluntarily Winding Up Of Company
Step 1 – Firstly, conduct a board meeting with 2 directors to pass a resolution along with the declaration
that the company has no debts and the company is in a position to pay its creditors after selling
company’s assets.

Step – 2 –In the second step, company issues a written notice to call a general meeting along with
explanatory statement proposing the resolution.

Step – 3 – In the third step, Company pass the ordinary resolution in the general meeting for the purpose
of winding up by ordinary majority or 3/4th of the majority by passing the special resolution.

Step – 4 – After passing the special resolution in the third step, conduct a meeting of creditors and if
majority of the creditors are having the same opinion that winding up of a company is beneficial for all
the parties, company will be wounded voluntarily.

Step – 5 – After taking the decision in the creditors meeting to wind up the company, file a notice with
the registrar to appoint a liquidator within 10 days after passing of resolution.

Step – 6 – In the sixth step, company has to give notice of the resolution in the official gazette and also
advertise the same in the newspaper within 14 days after passing of resolution.

Step – 7 – In the 7th step, company has to file certified copies of resolution (ordinary or special) passed
within 30 days of the general meeting.

Step – 8 – In the 8th step, wind up the affairs of the company, prepare the liquidator account and
auditors will audit the same.

Step – 9 – In the 9th step, company conducts a general meeting

Step – 10 – In the 10th step, company pass a special resolution in the general meeting to dispose books
and all other necessary documents after winding up the affairs of the company.

Step – 11 – In the 11th step, company submits account copy as well as application to the tribunal within
15 days of the first general meeting to pass order for dissolution.

Step – 12 – In the 12th step, If a tribunal found that your all accounts are in order and company has
followed all the necessary compliances, tribunal will pass the order for dissolving the company within 60
days of receiving the application

Step – 13 – The appointed liquidator submits a copy of order with the registrar in step - 13.

Step – 14 – In step – 14, registrar publish a notice on the official gazette declaring that the company is
dissolved after receiving the order passed by tribunal.