CA Atihash Agarwal (CHARTERED ACCOUNTANT) (187 Points)
09 March 2010Pls Advice
There is a company ABC LTD
The three members of a family are the only shareholders of the company.
Share Capital = 1 crore Assets = 3 crore
Reserve & Surplus = 2 crore
Pls advice how can this company be winded up through the shortest possible route.
Rasesh
(CS CWA MBA (Fin) B.Com LL.B (Spl))
(6501 Points)
Replied 11 March 2010
Firstly, distribute the Reserves as Dividend to the extent possible and capitalise the balance, so that Rs. 2 Cr. becomes free. Now the company has 1 Cr + of capital and equivalent value of assets.
Then, through a scheme for reduction of capital, pay back most of the capital to the members and leave only the amount that is required for having the legal status in place.
The Company can now go for voluntary members' liquidation. This would be a lenghty process but a cleaner one in which most of the balance assets would come back to the shareholders.
CA Atihash Agarwal
(CHARTERED ACCOUNTANT)
(187 Points)
Replied 13 March 2010
thanx 4 ur reply Mr Rasesh.
bt can u pls suggest me d shortest route possible.
I want the shortest way 2 wind up that company.
Yogesh Shah
(Managing Corporate Finance)
(1051 Points)
Replied 17 March 2010
Hy Harsh,
There are only three ways for winding up of co.
1) Strike off the name of co. from register of co. with Registrar
2) By oder of tribunal / court
3) Member's voluntary winding up
For applicability of first case, co. must be defunct co. - abovementioned co. ABC Ltd. doesn't appear as a defunct co.
For applicability of second case, co. must be unable to pay its debts - in ur case, it doesn't seen since assets are sufficient enough
In my opinion, Mr. Rasesh has given the shortest possible route.
Any other opinion in this????? plz. let me also know.
CAclubindia
