While There Is Nothing to Do in An Existing Business or There Is No Chance of Any Profit in Company So Why Take A Burden of Heavy Costly Compliance Formalities and Penalties for Non-Compliance. You Can Choose to Close Your Dormant Company or Inactive Company by The Process of Winding Up or Striking Off by Making an Application to Registrar of Companies Under Whose Jurisdiction Your Company Is Registered.
The Process of Winding Up Is Nothing It Is Just Some Steps by Which Company Is Put to End Its Corporate Existence in The Eye of Law and After That It Is Dissolved Totally.
A Number of Annual Compliance and Day to Day Compliance Is Mandatory for A Company to Comply for Surviving in The Business World Like Annual Filing, Income Tax Return, Auditor Appointment, Maintaining Various Registers or Records, GST Returns, Active Form for Company, Directors KYC And Many More with Their Due Dates and Heavy Fees. And in Case Any Company Is Failed in Comply This Compliance the Result Is Heavy Penalties, Fines, Disqualify Directors of The Company, And Even Removing the Name of The Company from The Register of Registrar of Companies.
Reasons for Winding Up:
Big Loss in A Company Business.
Shareholder Decision to Close Company
Shortage of Fund
Death of Director (In Case of One Person Company)
Creditors Decision in Case of Bankruptcy.
When It Is Mutually Decided Between Internal Management Of The Company And Their Shareholders/Stakeholders That It Is Necessary Now To Close This Business, But There Is Need To Firstly Settle All The Dues And Comply All The Compliance’s In Regard Of Company Then You Can Process The Winding Up Process, And Also You Have To Surrender All The Legal Certificates Of The Company Which Is Issued By Various Department In The Name Of Company.
Types of Winding Up: –
Compulsory Winding Up: – When Any Order Has Been Passed by The Court to Give Directions to Wound-Up Company.
Voluntary Winding Up: – There Are Many Situations in Which It Is Decided by The Directors of The Company to Wound Up Company Voluntary: –
When Company Is Incorporated for Only Specific Project, So After That Directors Take Decision to Wound Up Company?
When Any Specific Event Is Occurred, Which Is Mentioned Is Already Mentioned in Article of Association of Company That on That Specific Event It Is Required to Wound Up Company Voluntary.
In Case Company’s Is Able to Pay Its Debt in Situation of Voluntary Winding Up So It Is Treated as Member’s Voluntary Winding Up.
In Case Company’s Is Not Able to Pay Its Debt in Situation of Voluntary Winding Up So A Meeting of Creditors Has Been Called for Presuming Company Is Insolvent and Passing A Resolution for Winding Up of Company It Is Treated as Creditor’s Voluntary Winding Up.
Fast Track Exit Mode:- Any Company Having No Asset And Liability Can Apply Under Fast Track Exit Mode For Struck Off The Name Of Company From The Register Of Companies In Record Of Registrar Or This Option Of FTE Is Also Available For Those Companies In Case Of Not Commenced Any Business Activity Since Its Incorporation Or An One Year Has Been Passed Since Company Last Business Operation.