Running a business comes with its own challenges. Sometimes when things do not work out a business may have to be shut down. There can be several reasons to close or wind up the company. Here are four ways in which a private limited company can be closed.
Shutting down a private ltd. company is a challenging process. However, if you are the owner of an inclosed business in the form of a Private Limited Company, then it is even more so. A Pvt. Ltd. Co. can be shut down in several manners depending upon the requirements of the business owner. So, In this article we cover the following topics:
- Sell the Company
- Compulsory Winding Up
- Voluntary Winding Up
- Defunct Company Winding Up
If you are outlook of Closing down your company, whether it is solvent or insolvent, the process begins with a outlook to wind up the business. Depends up on your situation , this is made by stockholders or creditors of the company.
Companies Act 2013 under the Sectionn 270 , Closing a limited company may be either –
Any company registered in India under the Companies Act, which did an illegal act, Corrupt act or even if they contributed any action in some Corrupt or illegal activities then such company would be wound up compulsorily by the Committee.
Petition will be filed
The petition will be filed by the following:
- The Company or
- The Trade Creditors of the Company or
- Any contributory or Contributors to the company or
- The Central or State Government or
- By the Registrar of the Companies
Petition shall be appear together with the Statement of Affairs of the Company
Form 11 will be required for the order of winding up the company.
- Submit the complete audited books of accounts up to the date of the order.
- Provide the date, time and place for the Company Liquidator
- Surrender the assets and the documents of the assets.
Procedure for Voluntary Winding Up Private ltd Company –
- Board Meetingwith 2 Directors is conducted and a resolution consisting of a declaration given by directors that they are of the opinion that the company is under no debt or that it will be able to pay off its debt from the proceeds from the sale of its assets is passed.
- General Meetingis conducted after issuing due notice for proposing the resolution along with the explanatory statement. In the case of ordinary majority an Ordinary resolution, or a special resolution in case of the 3/4th majority, for the purpose of winding up is passed in the General Meeting. The winding up will start from the date of passing of the outlook.
- Creditors Meetingis conducted after passing the resolution and if majority creditors are of the opinion that winding up of the company is beneficial for all parties then the company can be wound up voluntarily.
- Liquidatorsaccount is prepared after winding up of scandals of the company, and the same as to search as well.