WINDING OF COMPANY/LLP

Company is a Juristic person. A company can be closed by the process called winding up. The companies Act provides two ways to winding up of company:-

1. Voluntary Winding Up
2. By the Tribunal ( by the operation of law)

Voluntary Winding Up:-

                The winding up of a company can also be done voluntarily by the members of the Company, if:

• If the company passes a special resolution for winding up of the Company.
• 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.

By the Tribunal (by the operation of law)

As per Companies Act 2013, a company can be wound up by a Tribunal, if:

• It is unable to pay its debts.
• The company has by special resolution resolved that the company be wound up by the Tribunal.
• It 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.
• The Tribunal has ordered the winding up of the company under Chapter XIX.
• If the company has not filed financial statements or annual returns for the preceding five consecutive financial years.
• If the Tribunal is of the opinion that it is just and equitable that be company should be wound up.
• 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 or misconduct.

Fast Track Exit (FTE) Mode

Ministry has issued Guidelines for "Fast Track Exit (FTE) Mode" to give opportunity to the defunct companies to get their names struck off from the register under Section 560 of the Companies Act, 1956 in time bound manner.

There are two main criteria under which a company may apply for FTE:-

• The company applying under FTE should not have any asset and liability.
• The company should not have commenced any business activity or operation since incorporation or at least one year must has been passed since last business activity or operation.

The Company desirous to get its name struck off from the Register shall file an application in the prescribed Form FTE online with the Registrar. The form shall be accompanied with an affidavit, an indemnity bond, statement of account duly certified by a Chartered Accountant in practice or auditor of the company and copy of board resolution showing authorization for filing the form.

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