The Ministry of Corporate Affairs has introduced
the rules and regulations 2020, in accordance with the requirements in the
Companies Act, as an alternative to the commonly used liquidation procedure in
accordance with the Indian bankruptcy law, which does not need to go before a
judge.Utilize Complynest to benefit from the termination of Private Limited
Company litigation!
How
to Close a Private Limited Company? There are four ways in which a private
company can be closed. The companies owners or directors can decide to
discontinue or wind up the business. The directors swear that they are the
directors of the company applying for closure.
A
private limited company demands to be windup or to be closed, meantime, there
is no changes in the business or the Directors of the private limited company,
and is not willing to continue their business operations. Any private limited
company can wind up both 'voluntary' and 'compulsory elements'. PVT LTD company
closure charges is a perusal that involves dickering all the properties,
assets, paying off all the loans and debts, paying all bankers and distributing
the remaining properties or assets to the shareholders of the private limited
company. However, it is always challenging to form a business or a company.
For
Closure up small businesses without having to go to a tribunal, the Ministry of
Corporate Affairs has notified the rules 2020, as per the provision in the
Companies Act which provides an alternative to the normally used liquidation
procedure as per India’s bankruptcy code. The scope of Company Law in India is
extensive and unrestricted; it takes into account the depth of Closure up of a
company and liquidation of its properties and assets. During the period of 'Closure
up of a company' if its members fail to comply with the rules and regulation,
they can get held criminally or civilly liable.
A
summary procedure for closure of pvt ltd company is conducted as per section
361 of the Companies Act, 2013. The liquidation process is carried out by an
Official Liquidator prescribed by the Central Government.
from debts and responsibility after Liquidation
Once the process of liquidation is over, the directors and the administrators
of the company are free from all debts, responsibilities, lender accounts and
pressure.
The low lost needed for the Liquidation process
The price or responsibilities expected in the liquidation process is relatively
small, as rates will be employed to the sale of assets of the company.
Withdrawing legal action from the Company
If the recommendation or consideration is passed advisedly by directors of the
company, they will dismiss legal action brought by the tribunal or by the court
and allow the company directors to concentrate on other business possibilities.
Withdrawing legal action from the Company
If the recommendation or consideration is passed advisedly by directors of the
company, they will dismiss legal action brought by the tribunal or by the court
and allow the company directors to concentrate on other business possibilities.
Protection for investors or creditors
Complying a continued struggle, investors or creditors will benefit from the
liquidation process as they will be useable for a failed payment, regarding the
statement of credits given by all investors or creditors.
The
Official Liquidator for the company is appointed by the central government
attempting Closure up of the company as per the summary procedure for
liquidation.
The
Official Liquidator who is appointed for procedure for closing a private
limited company will dispose of all the property and assets belonging to the
company after receiving the approval from the central government. Every sale
after that has to be done after getting the confirmation of the central
government. The gross sale will be paid to the liquidator. Any expenses
obtained in related with the sale shall be paid by the liquidator out of the
gross sale proceedings. The money received by the Official Liquidator will be
paid into the public account of India in the Reserve Bank of India (RBI) as per
section 349 immediately.
Within
thirty days, the Official Liquidator appointment should call upon the investors
or creditors of a company to explain and to prove their claims or due payments
from the company. The claims must be made within a time of thirty days in
specified format from the receipt of the call from the official liquidator. The
liquidator shall investigate and examine the proof of debt or loan lodged by
the investors or creditors. And within the time period of 30 days from the time
allowed for submitting the claims, the liquidator shall present the list of
creditors to the Central Government. The liquidator after the approval shall
then discharge the debts or loans or dues of the creditors.
The
Official appointed Liquidator shall take control or custody of all the property
and assets of the company and effects and actionable calls are done by the
liquidator to which the company is entitled or seems to be entitled. It
includes all assets of the company and all payment due to the company. The
official liquidator has the power to appoint an agent or auctioneer after the
approval of the central government to execute the process of selling the assets
and properties of the company.
The
Official Liquidator shall examine and investigate all the affairs of the
company and submit a detailed report to the Central Government in the specified
format. The report shall clearly describe whether any fraud or dupery has been
committed in formation, promotion, marketing or management of the matters of
the company. If the liquidator’s report demonstrates any fraud or dupery
carried out by the promoters, shareholders, directors or any other officer of a
firm, the Central Government might direct further investigation into the
matters and affairs of the company.
After
conducting a proper investigation, the report is submitted by the Official
Liquidator, on all verification processes, the Central Government may order to
commence the Closure-up process in the same manner in which a firm or company
is wind up by the tribunal.
(R.
34), after settlement, CL can make application for rectification in the list.