HERE'S HOW IT WORKS

Fill Form

1. Request a Quote

Simply fill the form to get started.

Expert Call

2. Payment Processing

We’ll connect & complete legalities.

Get Documents

3. Document Submission

Receive your company docs securely.

Get Documents

4. Receive your Work

Receive your company docs securely.

Winding Up - Company

 

Winding Up of a Company in India

What is Winding Up?

Winding up is the process of legally closing a company’s operations and dissolving its existence.
It involves selling off assets, paying debts, distributing any surplus to shareholders, and removing the company’s name from the Registrar of Companies (ROC) records.

Modes of Winding Up in India

1. Voluntary Winding Up

Initiated by the shareholders when the company is no longer in operation or is no longer viable.

  • Members’ Voluntary Winding Up – Company is solvent and can pay debts.

  • Creditors’ Voluntary Winding Up – Company is insolvent and unable to pay debts.

2. Compulsory Winding Up (by Tribunal/NCLT)

Ordered by the National Company Law Tribunal (NCLT) when:

  • Company is unable to pay its debts.

  • Business is carried out against the law or in a fraudulent manner.

  • Company defaults in filing financial statements or annual returns for 5 consecutive years.

  • It is just and equitable to wind up.

Key Steps in Winding Up a Company

  1. Board Meeting – Pass a resolution to propose winding up.

  2. Special Resolution – Shareholders approve winding up in the general meeting.

  3. Appointment of Liquidator – To handle asset sales, debt repayment, and compliance.

  4. Filing with ROC – Submit necessary forms and documents to MCA.

  5. Settlement of Liabilities – Pay off creditors and statutory dues.

  6. Distribution of Remaining Assets – Among shareholders.

  7. Final Dissolution Order – Company’s name is struck off from the ROC register.

Documents Required

  • Board and shareholders’ resolutions.

  • Latest financial statements.

  • Statement of accounts showing nil assets and liabilities.

  • List of creditors and their claims.

  • Indemnity bonds and affidavits from directors.

  • Consent from creditors (in voluntary winding up).

Timeframe

  • Voluntary winding up – 3 to 6 months (approx.)

  • Compulsory winding up – Varies depending on NCLT proceedings.

Consequences of Winding Up

  • Company ceases all business operations.

  • Assets are liquidated and proceeds are used to repay debts.

  • Company’s legal existence ends after dissolution.

Why Professional Help is Important

Winding up involves multiple legal, compliance, and tax procedures.
A professional ensures:

  • Correct documentation and filings.

  • Smooth settlement with creditors.

  • Avoidance of penalties and delays.