A Company can be closed in different ways. It may be either Compulsory winding up or Voluntary Winding up. Procedure to close a Company in India is as under
A company can be closed by any of the following ways
(A) Strike off a company under Section 560
Section 560, of the Companies Act, 1956, deals with strike off provisions of a defunct company. Any defunct company desirous to strike off its name from the register of Registrar of company can apply in Form FTE for strike off its name from the register maintained by ROC as per Guidelines for FAST TRACK EXIT MODE issued vide General Circular No. 36/2011 dated 7.6.2011. Similarly, ROC has also power to strike off any defunct company after satisfying himself of the need to strike off a defunct company and has reasonable cause. But before passing any order in this regard, an opportunity of being heard must be provided to the defunct company by following the due procedure u/s 560.
(B) Winding up Section 425, of
Companies Act, 1956, deals with modes of winding up.
The winding up of a company may be either -
(a) By the Tribunal (also known as compulsory winding
up)
(b) Voluntary winding up
(c) subject to the supervision of the Court Voluntary
Winding up
You can get a general picture from
the following steps of winding up which are summarized
below (except Voluntary winding up)
a) Issuing a written demand for debt payments to the
target company.
b) Present a winding up petition to the court and the
company
c) Court hearing for the petition
d) Granting of winding up order by the court
e) Meeting of creditors and other relevant parties
f) Appointment of liquidator.
g) Realization and distribution of companys assets to
the creditors
h) Realize of duties for liquidator
i) Dissolution of the company
Overview of Winding up :
Voluntary winding up which may be:
i) Members Voluntary winding up.
ii) Creditors Voluntary winding up.
In case of voluntary winding up, the entire process is
done without court supervision. When the winding up is
complete, relevant documents are filed before the court
for obtaining the order of dissolution. A Voluntary
winding up can be done by members or creditors. The
circumstances in which company may be wound up
voluntarily are:
a) When the period fixed for the duration of the company
in its articles has expired
b) When an event on the happening of which the company
is to be dissolved as per its articles happen.
c) The company resolves by special resolution at any
general meeting to be voluntary winding up.
In case company wants to convert the existing company to LLP, it has to comply with the requirements of LLP Act, 2008 (File Form 18 under LLP Act, 2008). After it gets approved, intimation regarding this can be given in Form 14 - LLP (Form for intimating to Registrar of Companies of conversion of the company into limited liability partnership (LLP)) with ROC.