A Company is a form of business registration where some or all the shareholders have limited liabilities which is governed by company act. Every company registration is done with a motive of earning profits and get successful, has long term objectives but not every company registration is successful. Not every business idea is implemented in the same manner in which it was thought of, due to some reasons things don't work out the way you wanted and that’s the reason then you might need to close your company. There are certain steps and procedures that need to be followed when closing a private limited company registration. You must abide by certain legal laws and regulations when closing a private limited company registration . There are many ways to close any private limited company such as voluntary winding up, compulsory winding up, company declared as defunct, etc. In this, we will go through the process of voluntary winding up of the private limited company.

Voluntary winding up of Company registration is a long tedious procedure to follow and there are certain mandatory compliances that need to be followed. Following are some of the situations of voluntary winding up of any company registration :

• The company passes a resolution in its general meeting upon the expiry of the term for which it was established or upon the occurrence of the event in respect of which the articles provides for its dissolution or,
• The company passes a special resolution for the voluntary winding up of the company.

The procedure of Voluntary Winding Up of Company:

• The majority of the directors of the company must agree for the voluntary winding up of the company and a special resolution is passed in the general meeting.
• A no-objection approval must be obtained from all the creditors defining that the company is not obliged to pay them.
• The company has to make a Declaration of Solvency and the same must be accepted by the trade creditors of the company. The company must show the Company’s credibility in the Declaration of Solvency.
• The appointed Liquidator will carry out the winding-up proceedings and prepare a report on the winding up of the assets,properties, debts, and so on. The report must be laid in the general meeting of the company for approval, passing a resolution for the dissolution of the company. The company Liquidator shall send a copy of the final accounts of the company and resolutions to the ROC.
• The Company liquidator shall also make an application to the Tribunal for an order of dissolution of the company. Upon being satisfied with the winding up, the Tribunal shall pass an order of dissolution within 60 days of the application. A copy of the final order should be filed with the ROC.

All the above-mentioned procedures shall be presented and filed in a prescribed form and even after the company gets wound up then also company’s name shall be prohibited for 2 years to be taken by any other applicant.

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About Author

CA Nayani Agarwal is a Chartered Accountant who scored All India Rank-24 and have 6 years of experience in the field of Auditing, GST, Income tax and Accounting. She has given consultation to distinct industries over these years.

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