WINDING UP A BUSINESS

Company Liquidation is the process where the company decides to close down its operations. All the assets including the properties of the company are to be distributed to its creditors if any and to its shareholders as per the legal terms.

Before you proceed to terminate the business there are a list of checks and balances to be done by obtaining various documents of clearance and confirmation.

Liquidating a company will not be an easy task as the process requires a lot of time, effort and expertise.

The winding-up of the company can be executed in two different ways
Compulsory winding up: The compulsory winding up of a company can be executed by the order of a tribunal or a court, bypassing a special resolution made by the directors during the company’s board meeting, which proposes a court intervention. Identically, by filing a petition to a court or a tribunal by any official person of the company, if the company has indulged in any fraudulent/unlawful activities, it can be winded up compulsorily.

Voluntarily winding up: The company requires a resolution from the directors, to sell off all assets of the company or to transfer the stakes to another entity.

CHECKLIST RULES FOR WINDING UP A COMPANY

a. Board meetings should be convened for the approval of winding up a company.
b. A notice should be issued in written form for convening a general meeting to pass a resolution on the winding up procedure.
c. An appointment of an official liquidator or insolvency professional should be made.
d. The income tax department should be acknowledged with respect to the resolution passed at the meeting for voluntary winding up of the company.
e. Simultaneously, the No Objection Certificate (NOC) should be obtained from the Income tax department.
f. If the creditors are in majority, then the creditors meeting should be conducted to approve the resolution passed in the general meeting; given that creditors are owed 2/3rd of the company debts.
g. Before initiating a wind up process, an intimation should be conveyed to the Insolvency and Bankruptcy Board of India (IBBI) within 7 days from the date of approval of the resolution.
h. An announcement should be made to the public within 14 days of passing the wind up a resolution in an official gazette, one english newspaper, and one local newspaper, where the registered company has been located.
i. The whole winding up the process should be completed within 12 months from the initiation of the liquidation.

DOCUMENTS REQUIRED FOR WINDING UP

The documents required for the closure of the company are;
        
    1. PAN card of the company
    2. Certificate of closure of the company’s bank account .
    3. An indemnity bond, which should be notarized by the directors.
    4. Latest statement of company accounts.

    5. Statement of accounts related to all assets and liabilities of the company, audited by Chartered                        Accountant (CA). 

    6. Proof of approval of the resolution by 3/4th of board members.  
    7. Application for removing the name of the company.

We are happy to assist and manage the entire liquidation process to your satisfaction.
Once you appoint us we shall obtain the Company Termination Certificate with utmost professionalism within the shortest possible time.