Acquisition Windup

Closing down a company is require a routine procedure. Without doing so, you would need to annually meet the requirements of the Registrar of Companies (which means spending money on audit and compliances). The bigger reason you would want to do this, of course, is because it releases the assets and investments made by you. The procedure for winding up of a company can be initiated voluntarily by the shareholders or forced by a tribunal or a court.

There are two mode of Winding up:

• Voluntary winding up by Shareholders
• Windup by Court Process by Tribunal

Voluntary Winding Up Of a Company

winding up Procedure begin with:

• Pass a special resolution in a board meeting
• In a general meeting, pass a resolution requiring that a company be wound up on account of expiry of a duration specified in the articles of association (AoA) or the meeting of a condition specified in the AoA requiring it to be wound up.

Closure by a Tribunal

The Companies Act, 2013 contains several new rules for closure of a company, updating those contained in the Companies Act, 1956.

A major one is that the Act specifies that a company can be wound up by a Tribunal for any one or more of the following reasons:

• If the company is unable to repay their debts/loans;
• If the set-up (company) has a resolution put up that it can be dissolved or wound-up through a tribunal under certain conditions;
• If the company has not filed returns or submitted financial statements for five consecutive years;
• If the company has acted against the integrity and sovereignty of the country and has interfered against the relationship between neighbouring or foreign countries and India;
• If the tribunal has decided (by means of any finds or by Chapter XIX) that it is only correct to wind-up the operations of the company;
• If the company or its members have been involved in any fraudulent transactions, been getting financial gain through illegal transactions or the company has been earning profits through fraudulent means;
• In any of the above cases, a tribunal is formed and a resolution is taken to wind-up the operations of the company under study. Such tribunal decisions are deemed final and after hearing the order, a Form 11 is issued for winding-up.