Thinking of closing a Private Limited Company?
Closing of a Private limited company can be due to any reason such as suffering loss, bankruptcy, order by the court, etc. Closing means winding up of a company. Also there are two methods by which a private limited company can be closed.
Methods of winding up:
- A Private limited company can be closed Voluntarily. Voluntary winding up may be by Member’s or Creditors.
- A Private limited company can be closed by Tribunal or Court
Procedure for winding up Voluntarily:
- A Board Meeting to be conducted by the Directors and a resolution is to be passed
- Then a General meeting is to be conducted after issuing notice and a resolution is passed for winding up.
- If creditors are of the opinion of winding up of a company they can also voluntarily wind up a private limited company by passing a resolution.
After hearing the petition of winding up if the court is satisfied passes the order of closure of a company or if required appoints a liquidator.
Procedure for winding up by Tribunal:
Winding up of a Private limited company by Tribunal or court should follow certain procedure:
- The Tribunal or a court shall appoint a Official liquidator by sending him notice of his appointment and will be in charge of the company till the company gets dissolved.
- The liquidator appointed shall have right to access books of accounts for inspection, liabilities, creditors, loans, etc.
- Then the official liquidator should prepare a report after inspection and should furnish it before the court.
- After inspection and if the court is satisfied passes the order of dissolution of the company.
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