Mandatory Winding Up

Any company registered under Companies Act, 2013 which did an unlawful act, fraudulent act or even if the company contributed any kind of action in some fraudulent or unlawful activities then such company would be wound up mandatorily by the Tribunal (Closure of Private Limited Company India).

Process of mandatory winding up
1)   The petition will be filed by the company or any contributors to the company or registrar of the companies or trade creditors of the company or central or state government.
2)   All the documents supplemented by petition will be audited by a practising CA and the view given by the Auditor on the financial statement must be unqualified.
3)   The Petition should be advertised in a daily newspaper at least for 14 days and the advertisement should be in English and regional language of that area.
4)   Form 11 is necessary for the order of winding up the company. Form 11 should include-
(i)Complete audited books of the accounts up to the date of the order need to be submitted.
(ii)Date, place and time for the company liquidator should be provided.
(iii)Assets and the documents of the assets should be surrendered.
If the tribunal finds all the accounts are in order and all the necessary compliance have been fulfilled, the tribunal would pass the order for dissolving the company within a period 60 days of receiving the claim. After the passing of the order by the tribunal, the registrar will then issue a notice to the Official Gazette affirming that such company is dissolved.

Voluntary Winding Up

Voluntarily winding up of a private limited company requires long procedural compliance to follow. There are certain compulsory requirements which have to be finished to close down a company voluntarily.
Process of voluntary winding up
As per the Companies Act 2013, Board Resolution is necessary to wind up the company voluntarily. However, the majority of directors must approve for winding up.

• Special Resolution is necessary to wind up the company where 3/4th of the total Shareholders must cast their vote in approval of winding up the company.
• The approval of the trade creditors is also necessary to wind up the company. Trade Creditors have to give their approval that they don’t have any responsibility if the company gets wound up.
• Declaration of Solvency has to be made by the company and the same must be accepted by the trade creditors of the company. Company’s credibility in Declaration of Solvency needs to be shown by the company.
• All the above processes shall be presented and filed in the respective form and even after the company gets wound up then also company’s name shall be forbidden for 2 years to be taken by any other company.

Defunct Company Winding Up

As per the Companies Act, 2013, a defunct Company is a company which has gained the position of a Dormant Company. The government provides some relief to such defunct or dormant company because there are no financial transactions that are carried out by the dormant companies.
Process for winding up a defunct company
A Defunct or Dormant Company can be wind up with an advance process which requires the submission of the STK-2 form. Hence, Form STK-2 is necessary in order to wind up a defunct company. The form STK-2 needs to be filled by the Registrar of Companies and the same needs to be duly signed by the director of the company approved by its board to do so.