At times the company may have to close its operations, which may arise due to several reasons. Section 248 of the Companies Act 2013 and Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 talks about the removal of the name of the company from the ROC.
Sometimes a company is registered with the view to do business in the future, which affects the cost management as the company is not functioning in the present scenario. So what is to be done now? It is better to close the company in this scenario.
Selling the Company:
Selling a limited liability company is also a form of voluntary liquidation. This can be done by selling shares of the company (selling a majority stake in the company). Technically, this is not a real liquidation where the holdings are transferred to another individual or entity and the controlling shareholders are released from their actions and obligations.
A company that is involved in any kind of malpractice, unlawful activity, or any activity which is fraudulent in nature is asked by the court to shut its operations.
Defunct Company Winding Up:
A Defunct or dormant company does not involve in any kind of financial transactions. This type of company is given certain relief by the government.
A voluntary winding-up process can be initiated by conducting a special general meet or during the AGM. This decision is taken by the board when the company is unable to clear the debts or when the company does have sufficient funds to meet its requirements.
Documents that are required for the closure of the company
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