Members voluntary winding up of private company

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CA SONIYA AGARWAL (Querist)
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18 November 2014 I HAVE TO DO MEMBERS VOLUNTARY WINDING UP OF PRIVATE COMPANY , KINDLY HELP ME WITH IT , I HAVE NO IDEA HOW TO GO FOR IT, WHAT RESOLUTION TO BE PASSED?? , WHAT ROC FILING IS NECESSARY ??

AN EARLY REPLY WILL BE APPRECIATED.

CS Mitesh Mehta

CS Mitesh Mehta (Expert)
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19 November 2014 1. Call Board meeting, at a meeting of the Board, directors make a declaration of solvency verified by an affidavit stating that they have made full enquiry into the affairs of the company and that having done so they have formed an opinion that the company has nodebts or that it will be able to pay its debts in full within such period not exceeding three years from the commencement of the winding up as may be specified in the declaration.

2. File e-Form 62 for filing aforesaid declaration of solvency

3.convene a meeting of the members of the company and pass the necessary resolution of winding up. In General Meeting appoint one or more liquidator & fix his remuneration.

4.The company has to give notice to the Registrar relating to the appointment of liquidator or liquidators made by it under Section 490, of every vacancy occurring in the office of the liquidator, and of the name of the liquidator or liquidators appointed to fill every such vacancy under Section 492. The notice aforesaid shall be given by the company in within 10 days of the event to which it relates. In case of default, the company and every officer of the company (including every liquidator or continuing liquidator) who is in default, shall be punishable with fine extending up to ` 1,000 for every day till the default continues [Section 493]. The liquidator must also inform the Registrar of his appointment within thirty days thereof and publish the notice
in the Official Gazette (Section 516). He is also required to file Form No. 152 of the Companies (Court) Rules, 1959 with Registrar. He is also required to notify his appointment to the Income-tax Officer who is entitled to assess the income of the company. He must also comply with the other provisions of the Section 178 of the Income Tax Act.

(5) The liquidator (under members’ voluntary winding up) may transfer the whole or any part of the company’s business or property to another company (called the transferee company) and receive, with the sanction of the special resolution of the transferor company by way of compensation for the transfer or sale, shares, policies or other like interests in the transferee company, for distribution among the members of the transferor company or may enter into any other arrangement whereby the members of the transferor company may in lieu of receiving cash, shares, policies, or other like interests participate in the profits or receive any benefit from the transferee company. Any sale or arrangement made by the liquidator shall be
binding on the members of the transferor company [Section 494(1) and (2)].
If any member of the transferor company, who did not vote in favour of the special resolution, objects to the arrangement entered into by the liquidator, he may express his dissent in writing addressed to the liquidator and leave it at the registered office of the company within seven days after the passing of the resolution and he may also require the liquidator either to abstain from carrying the resolution into effect or to purchase his interest at a price to be determined by arrangement or by arbitration. If the liquidator decides to purchase the dissenting member’s interest, the purchase money shall be paid before the company is dissolved [Section
494(3) and (4)].
(6) In the event of the winding up continuing for more than one year, the liquidator is required to call general meeting of the company at the end of the first year from the commencement of the winding up, and at the end of the each succeeding year, or as soon thereafter as may be convenient within three months from the end of the year or such longer period as the Central Government may allow, and must lay before the meeting an account of his acts and dealings and of the conduct of the winding up during the preceding year, together with a statement in the prescribed form containing the prescribed particulars with respect to the proceedings and position of liquidation. In case of default, the liquidator is liable to a fine not exceeding
Rs. 1,000 (Section 496).
(7) As soon as the affairs of the company are fully wound up, the liquidator has to make an account of the winding up showing how the winding up has been conducted and the property of the company has been disposed of and is required to summon a general meeting of the company for the purpose of laying the account before it and giving any explanation thereof. The meeting must be called by giving a month’s notice specifying the time, place and object of the meeting and the notice must appear in the Official Gazette and also in some newspaper circulating in the district where the registered office of the company is situate. Within
one week after the meeting, the liquidator must send to the Registrar and the Official Liquidator a copy of the account and shall make a return to each of them of the date and holding of the meeting. If a quorum is not present at this meeting, the liquidator shall make a return that the meeting was duly called but the quorum was not present [Section 497(1) to (4)].

(8) The Registrar, on receiving account and the return shall forthwith register them. The Official Liquidator, on receiving the account and the return shall, as soon as may be, make and the liquidator and all officers, past or present, of the company shall give the official liquidator all reasonable facilities to make a scrutiny of books and papers of the company and if on such scrutiny the official liquidator makes a report to the Court that the affairs of the company have not been conducted in a manner prejudicial to the interest of itsmembers or to public interest then from the date of submission of such report the company shall be deemed to be dissolved. The Official Liquidator scrutinise the accounts of pre-liquidation as well as of post-liquidation
period and for discharging this duty the Voluntary Liquidator and all past and present Officers of the company shall give to the Official Liquidator all reasonable facilities.

If on such scrutiny the Official Liquidator makes a report to the Court that the affairs of the company have been conducted in a manner prejudicial to the interest of its members or to public interest, the Court shall by order direct the Official Liquidator to make a further investigation of the affairs of the company and for that purpose shall invest him with all such powers as the Court may deem fit.

On the receipt of the report of the Official Liquidator on such further investigation, the Court may either make an order that the company shall stand dissolved with effect from the date to be specified by the Court therein or make such other order as the circumstances of the case brought out in the report permit. If the liquidator fails to call a general meeting of the company, he is also liable to fine extending up to `5,000 [Section 497(5) to (7)].