Ex-Legal Solutions

Winding Up of a Company

A private limited company is an artificial judicial person and requires various compliances like appointment of Auditor, regular filing of income tax return, annual return filing and more. Failing to maintain compliance for a Company could result in fines and/or disqualification of the Directors from incorporating another Company. Therefore, if a private limited company has become inactive and there are no transactions in the company, then it is best to wind up the Company.

Voluntary winding up of a company can be initiated at anytime by the shareholders of the company. In case there are any secured or unsecured creditors or employees on-roll, the outstanding dues must be settled. Once all the dues are settled, the bank accounts of the company must be closed. Finally, the company must regularise any overdue compliance like income tax return or annual filing and surrender the GST registration. Once, all activities are stopped and the registrations are surrendered, the winding up application petition can be filed with the Ministry of Corporate Affairs.

Ex-legal Solution can help you wind up your Company, quickly and easily. Ex-legal Solution can help you initiate the winding up process within 10 to 14 business days. The entire process for winding up of a company can be completed within 3 to 6 months, subject to government processing times. The timeline for winding up of a company could also differ from case to case, based on unique circumstances. To discuss more about winding up a company, get in touch with an Ex-legal Solution Advisor.

Winding up of a Company by Tribunal

Winding up of a company may be required due to a number of reasons including closure of business, loss, bankruptcy, passing away of promoters, etc., The procedure for winding up of a company can be initiated voluntarily by the shareholders or creditors or by a Tribunal.
As per Companies Act 2013, a company can be wound up by a Tribunal, if:
1. The company is unable to pay its debts.
2. The company has by special resolution resolved that the company be wound up by the Tribunal.
3. The company has acted against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign
states, public order, decency or morality. 4. The Tribunal has ordered the winding up of the company under Chapter XIX.
5. If the company has not filed financial statements or annual returns for the preceding five consecutive financial years
6. If the Tribunal is of the opinion that it is just and equitable that be company should be wound up.
7. If the affairs of the company have been conducted in a fraudulent manner or the company was formed for fraudulent and unlawful purposes or the persons concerned in the formation or management of its affairs have been guilty of fraud, misfeasance or misconduct in connection therewith and it is proper that the company be wound up.

Voluntary Winding up of a Company

The winding up of a company can also be done voluntarily by the members of the Company, if:
1. If the company passes a special resolution for winding up of the Company.
2. The company in general meeting passes a resolution requiring the company to be wound up voluntarily as a result of the expiry of the period of its duration, if any, fixed by its articles of association or on the occurrence of any event in respect of which the articles of association provide that the company should be dissolved.

Reasons to Winding Up of a Company

Avoid Compliance

A company is a legal entity and a juristic person established created under the Companies Act. Therefore, a company is required to maintain regular compliance throughout its lifecycle. Winding up process can be to close a company that is not active and avoid compliance responsibilities.
Fast to Close

A company can also be closed by filing an application with the MCA in about 3 to 6 months. The entire process can be completed online. Hence, the process for closing a company is fast and easy in India through Ex-legal Solution.
Avoid Fines

A company that doesn't file its compliance on time incurs fines and penalty including debarment of the Directors from starting another Company. Hence, it is better to officially wind up a company that is inactive and avoid potential fines or liabilities in the future.
Low Cost

When compared to maintaining compliance for a dormant company, it might actually be cheaper to wind up a company and incorporate again when the time is right. Ex-legal Solution can help you wind up a company starting from just Rs.29899 all inclusive fee.
Easy to Close

A company with minimal or no activities that has maintained proper compliance can be closed very easily in India. If any compliance is overdue, the compliance must first be regularised and registrations surrendered to close the company.