There are only three ways of Winding up a Company:-
- Winding up by the tribunal
- Voluntary Winding up(This part had been omitted in Companies Act, 2013 now this part is regulated by IBC,2016)
- If a Company has gained a status of defunct Company
Winding Up by the Tribunal
- By Special Resolution resolving that company be wound up
- Company has acted against the national Interest (Sovereiegnity,integrity,security etc.)
- Defaulted in financial statements/annual returns for immediately preceding 5 Consecutive FY.
- On application by the Registrar or any other person authorized by the Central Government.
- On Just and equitable ground
In the above cases petition may be presented by:
- The Company
- Any Contributory or Contributors
- All or any of the persons specified in Clause (a) and (b)
- Any person authorized by Central Government in that behalf
- In case affairs of the company conducted in a Fraudulent manner, by the CG/SG
Winding up regulated by IBC (Voluntary winding up)
An application to the adjudicating authority (being the Tribunal-NCLT) for initiation of corporate insolvency resolution process can be made only when there is a “default” in payment of debt by corporate person. In this regard, it is to be noted that term “default” has been defined in the code to mean non repayment of a debt, whether whole or in part, which has become due and payable by a corporate person. This would imply that, now under the Code, insolvency resolution proceedings can be initiated even against a financially solvent company having made a default in payments of its debts, since the same would fall within the purview of “default” under the code. Once the application for initiation of corporate insolvency resolution process is made and the same is accepted by the Tribunal, an insolvency professional is appointed for conducting the corporate insolvency resolution process.
Application under IBC can be made by:
- Financial Creditor
- Operational Creditor
- Corporate Debtor
If a Company has gained a status of defunct company
Defunct company is a company which has:
1. Nil asset and nil liability, and
2. Not commenced any business or activity since its incorporation
Not been carrying any business operation since last one year.
The Companies Act, 2013 laid down the procedure for winding up a Defunct Company. A Defunct Company can be wind up with a fast-track exit (FTE) which requires submission of the STK-2 form. Hence, Form STK-2 is required in order to wind up a Defunct Company and there is no additional procedure for that. The form STK-2 needs to be filled with the Registrar of Companies and the same needs to be duly signed by the director of the company authorized by its board to do so.