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Winding Up - Company

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Winding Up of a Company

The Winding Up of a Company is the process of closing down the business operations and liquidating the company’s assets to pay off its liabilities, as per the provisions under the Companies Act, 2013. This filing ensures legal compliance and proper dissolution of the company.

Who Needs to File for Winding Up?

  • Companies that wish to close their operations and cease to exist as a legal entity.
  • Shareholders and directors of a company who have agreed to voluntarily wind up the company.
  • Creditors seeking to wind up a company due to insolvency or inability to meet financial obligations.
  • Companies that have fulfilled their business objectives and no longer wish to operate.

Benefits of Winding Up Filing

  • Legal Closure: Ensures the company’s operations are legally terminated and dissolved as per the Companies Act, 2013.
  • Debt Settlement: Allows for the settlement of all company debts and liabilities before dissolution.
  • Asset Distribution: Ensures proper distribution of any remaining assets among the company’s shareholders or creditors after debts are settled.

Consequences of Non-Compliance

If a company fails to initiate the winding-up process when required, it may continue to accrue liabilities, including penalties for non-compliance with statutory requirements. This can lead to legal actions against the company and its directors, as well as unresolved financial obligations.

Documents Required for Winding Up Filing

  • Board resolution or shareholders’ resolution approving the winding-up process.
  • Statement of Affairs of the company, detailing assets, liabilities, and creditors.
  • Creditors' consent or a declaration of the inability to pay debts (in the case of voluntary winding-up).
  • Declaration of solvency (if the company is solvent and voluntarily winding up).
  • Any other documents required by the Ministry of Corporate Affairs (MCA), such as the application to the Registrar of Companies (RoC).

Step-by-Step Process for Winding Up Filing

  • Board or Shareholders' Resolution: Pass a resolution agreeing to wind up the company, either voluntarily or under the supervision of a tribunal.
  • Prepare Statement of Affairs: Compile the company’s financial statements, including assets, liabilities, and creditors.
  • File with MCA: Submit the winding-up documents, including resolutions and the Statement of Affairs, to the Ministry of Corporate Affairs (MCA).
  • Liquidation Process: Upon approval, appoint a liquidator to handle the liquidation of assets and settlement of liabilities.
  • Close Company Records: After liquidation, file final documents with the MCA to confirm the company has been dissolved and removed from the register of companies.

Filing Lounge's Process for Winding Up Filing

  • Initial Consultation: We evaluate your company’s situation and provide advice on whether winding up is the best option.
  • Document Preparation: We help prepare all necessary documents, including resolutions and the Statement of Affairs, in compliance with the law.
  • Filing with MCA: We file the winding-up documents with the Ministry of Corporate Affairs (MCA) to ensure that the process is initiated properly.
  • Post-Filing Support: We offer ongoing support during the liquidation process and assist with any further filings required for the company’s dissolution.

How Filing Lounge Can Help

Filing Lounge offers expert services to guide you through the winding-up process, ensuring that your company’s closure is conducted in full compliance with legal requirements.

  • Expert Guidance: Receive expert advice and clarity on the winding-up process, including the best approach for your company.
  • Comprehensive Assistance: We handle all aspects of the winding-up filing, from document preparation to submission and liquidation procedures.
  • Timely Processing: We ensure the winding-up process is completed on time, meeting all regulatory deadlines.
  • Compliance Assurance: We make sure your winding-up filing is fully compliant with the Companies Act, 2013 and other applicable regulations.

For more information, visit our Winding Up Filing page.

With Filing Lounge, the winding-up process is streamlined, simple, and legally compliant, ensuring your company’s closure is handled with care and precision.

Related Guides

Documents Required For Winding Up - Company

Proprietorship vs Limited Liability Partnership (LLP) vs Company

Features Proprietorship Partnership LLP Company
Definition A sole proprietorship is an unregistered business entity managed by a single individual. A legal contract between multiple parties to jointly manage and run a business operation. A business type that combines aspects of a partnership and the limited liability of a corporation. A registered business where owners and shareholders have limited liability.
Ownership
  • Single individual
  • Min 2 Partners
  • Max 50 Partners
  • Designated Partners: Min 2(No upper limit)
  • Min: 1 shareholder (for a private company), 7 shareholders (for a public company)
  • Max: 200 shareholders (for a private company), no upper limit (for a public company)
For One Person Company
  • Minimum: 1 individual
  • Maximum: 1 individual
Registration Time 7-10 working days
Promoter Liability Unlimited Liability Limited Liability
Documentation
  • Partnership Deed
  • PAN card of the partnership firm
  • LLP Agreement
  • Incorporation Certificate
  • PAN card of the LLP
  • MOA
  • AOA
  • Certificate of incorporation
  • PAN card of the company
Governance No specific governing law Governed by the terms outlined in the partnership deed Governed by the LLP agreement Governed by a formal structure including a Board of Directors
Transferability Business cannot be transferred Ownership transfer requires the consent of all partners as outlined in the partnership deed. Transferable Easily Transferable for public companies. In private companies, there might be some restrictions.
Compliance Requirements
  • Income tax filing if the turnover exceeds Rs. 2.5 lakhs.
  • Must file ITR 5
  • Must file ITR 5
  • File Form 11
  • Form 8
  • MCA filing
  • Auditor's appointment
  • File ITR 6

Winding Up a Company FAQ's

What is Winding Up a Company?

Winding Up is the process of closing a company and liquidating its assets to pay off its debts and liabilities. This process is governed by the Companies Act, 2013 and can be voluntary or by a tribunal order.

Why is Winding Up necessary?

Winding up is necessary when a company is no longer able to continue its business operations, is insolvent, or has fulfilled its purpose. It helps ensure that the company's debts are paid and assets are distributed accordingly.

What documents are required for Winding Up?

The documents required for winding up include the board resolution or special resolution for winding up, a statement of affairs of the company, consent from creditors (if applicable), appointment of liquidator, and other documents required by the Ministry of Corporate Affairs (MCA).

Can Winding Up be done online?

Yes, the winding-up process can be initiated online through the Ministry of Corporate Affairs (MCA) portal by submitting the necessary forms and documents. However, certain steps like creditors' consent may require physical documentation.

What is the resolution for Winding Up?

The resolution for winding up is a formal decision passed by the Board of Directors or shareholders of the company, authorizing the winding-up process. This resolution is required for voluntary winding up and must be filed with the MCA.

What happens after submitting the Winding Up filing?

Once the winding-up documents are submitted, the MCA processes the filing. A liquidator is appointed to oversee the liquidation of assets and settlement of debts. The company will be formally dissolved once the process is completed.

Can a company file for Winding Up after its formation?

Yes, a company can file for winding up at any time if it is no longer able to continue its operations or if it becomes insolvent. The decision must follow the provisions of the Companies Act, 2013 and the company’s Articles of Association.

What is the process for Winding Up?

The process involves passing a resolution to wind up the company, preparing a statement of affairs, obtaining creditor consent (if required), appointing a liquidator, and submitting the necessary forms to the MCA. The liquidator will then liquidate the company’s assets and settle the debts.

What happens if I do not file for Winding Up?

If winding up is not filed when required, the company may face legal and financial consequences. This could result in unpaid debts, unresolved liabilities, and may lead to further complications with the Ministry of Corporate Affairs.

How long does the Winding Up process take?

The winding-up process may take several months or even years, depending on the complexity of the company’s financial status, the number of creditors, and the liquidation of assets. However, it can typically take 6 months to 2 years to complete.

How can Filing Lounge help with Winding Up?

Filing Lounge provides expert assistance in managing the winding-up process, from preparing the necessary documents and resolutions to coordinating with the Ministry of Corporate Affairs (MCA) and the liquidator to ensure the process is completed smoothly and legally.

Related Business Registrations

In addition to registration or incorporation, a business may require other registrations depending on the business activity undertaken. Talk to an Advisor to find out registrations your business may require post registration.

FSSAI Registration
IE Code
Trademark Registration
Copyright Registration
Salaried Tax-filing
GST Return Filing

MCA Compliance

Each registered entity is required to meet its compliance duties at the close of each financial year. This generally includes auditing financial statements, filing income tax returns, and submitting annual forms to the Ministry of Corporate Affairs (MCA).

Compliance For Form Due date Penalty
Commencement of Business Intimation to Registrar for Commencement of Business Within 180 days from incorporation INR 50,000 on company and INR 1,000 per day on directors for each day of default
Annual KYC of Directors DIR 3 E-KYC 30th September of every year INR 5,000 for late filing
Appointment of Auditor Form ADT 1 Within 15 days of the AGM INR 300 per day (max INR 12,000)
Financial Statements Form AOC 4 Within 30 days from the AGM INR 100 per day of default
Annual Return Form MGT 7 Within 60 days from the AGM INR 100 per day of default

All Limited Liability Partnerships (LLP) in India must file annual returns with the Ministry of Corporate Affairs (MCA). FilingLounge provides affordable services to help you keep your LLP compliant.

LLP Compliance Form Due date Penalty
Annual KYC of Directors DIR 3 KYC 30th September of every year INR 5,000 for late filing
Annual Return Form 11 May 30th every year INR 100 per day of default
Statements of Accounts and Solvency Form 8 30th October every year INR 100 per day of default (minimum penalty INR 10,000)

In addition to the filings listed above, there may be other compliance requirements relevant to LLPs. To ensure all compliance needs of your LLP are met, please seek assistance from a Filinglounge Advisor.

Entity Compliance Form Due date
Private Limited Company Annual Return MGT-7 Within 60 days from the conclusion of the AGM
Financial Statements AOC-4 Within 30 days from the conclusion of the AGM
DIR-3 KYC DIR-3 KYC 30th September every year
Return of Deposits DPT-3 30th June every year
Appointment of Auditor ADT-1 Within 15 days from the conclusion of the AGM
Income Tax Return (Non-audit case) ITR-6 31st July every year
Income Tax Return (Audit case) ITR-6 30th September every year
Annual GST Return GSTR-9 31st December of the subsequent financial year
MSME Form Form 1 (MCA) half-yearly return by 31st October (April to September), & 30th April for the period October to March every year
Limited Liability Partnership Income Tax Return (Non-audit case) ITR 5 31st July every year
Income Tax Return (Audit case) ITR 5 30th September every year
Annual Return Form 11 30th May every year
Financial Statements Form-8 30th October every year

Note : There might be extra filings needed depending on your business type and activities. Talk to a FilingLounge advisor to get the right guidance for your company's compliance.