In legal terms, the closing up of a company is called winding up. There are 4 mains reasons owing to which any private limited company in India could be wound up. The Companies Act, 2013 laid down the procedure for winding up of companies in the following ways or methods.
Procedure For Voluntary Winding Up. 1. Conduct a Board meeting with 2 directors and thereby pass a resolution with a declaration given by directors that they are of the opinion that the company has no debt or it will be able to pay its debt after utilizing all the proceeds from the sale of its assets.
The winding-up or liquidation of a company is the process by which a company’s assets are collected and sold in order to pay its debts. Any monies remaining after all debts, expenses, and costs have been paid off are distributed amongst the shareholders of the company.
Immediately, the directors must be meeting with the creditors of the company. If 2/3rds, in value terms, of creditors, agree to the winding up of the company, it may be wound up voluntarily. If not, a Tribunal will have to wind up the company.