Procedure for voluntary wind up
* With respect to the companies act, 1961, the resolution of the board meeting is essential to start the winding up process. * In a special resolution, a majority of 3/4th of the company shareholders should register their vote on the side of winding up the company. * Similarly, the company’s creditors should approve the resolution made for winding up, without complications. * The “Declaration of Solvency” should enclose outstanding debts along with the auditor report, regarding total assets of the company and it should be forwarded to the RoC (Registrar of Companies). * Now the official liquidator will be appointed to perform the winding up process from the date of passing the resolution. * After the resolution has been passed, the liquidator should open a bank account within a period of one month. * In any scheduled bank, the liquidator should open a bank account in the name with, the prefix “ the name of the company” followed by “voluntary liquidation”. * The liquidator will collect all the reliable documents and prepare a report consisting of final accounts and present this in a general meeting for approval. Here, the majority of members should pass this resolution. * After compiling all the necessary documents, the final report will be sent to the tribunal for reference. * After examining the credibility of the report, the tribunal will pass a decree for the dissolution of the company. * A copy of that decree will be forwarded to RoC by the liquidator within 30 days of the order dated. * Now the RoC will mandate the winding up of the company, and remove the name of that company from the registry. * Simultaneously, the RoC will publish this order in the official gazette of india. Compulsory wind up: Any company registered in India can be compulsorily winded up by theaction of the tribunal or court, if the respective company has indulged in any fraudulent/ unlawful activities. The petition can be filed by * The company itself * The Registrar of companies (RoC) * The creditors of the company * The central/state governments *The contributors Procedure for compulsory Windup * The petition to the tribunal should be filed along with the statement of affairs, of the disputed company. * After scrutinizing the credibility of the petition filed, the tribunal may accept or reject the aforesaid petition. * Here, the liquidator will be appointed by the tribunal itself. * The liquidator will execute all assets of the company, examine the book of accounts, and compile into a draft/report. * These reports are to be forwarded to the tribunal after the winding up committee had accepted the same.
Our Procedure
Our Procedure for Winding Up A Private Limited Company Declaration To ROC The statement of accounts must be submitted within a month before the submission of the application to wind up the company. This is a declaration to the Registrar of Companies that the contents of the application are only to be considered, and that the company has no other assets or liabilities. Submit Document Within a month of submitting the statement of accounts, the application must be submitted along with the documents mentioned above. Our representatives will guide you through the entire procedure. Final Closure It takes at least two to three months to complete the closure of your company, but it could take much longer, depending on the findings of the liquidator appointed.
FAQs
1. Why is liquidation important?
Liquidation is important for the following reasons- * Once the liquidation process is over, the directors and other company officials are free from all creditor liabilities. * If the company directors pass a voluntary declaration, the company can avoid legal actions from a tribunal or a court. * The cost involved in the liquidation process is comparatively lower than other modes of closure * The creditors are benefited as they will be eligible for default payment from the sale of assets
2. What causes a company to go into liquidation?
Some of the most prominent causes for a company to go into liquidation are- * Insolvency * Bankruptcy * Unwillingness to continue with business operations
3. What is the liquidation strategy?
The liquidation strategy refers to liquidating the assets of a company before winding up operations. By initiating the liquidation process, the company may sell its assets to meet obligations and repay liabilities. As a part of the liquidation strategy, a liquidator is appointed to oversee the process of selling the company assets. The remaining balance, if any, after repayment to the creditors, gets distributed among the shareholders of the company
4. What does liquidation mean for employees?
The liquidation marks the end of business operations by a company and this may lead to the unavoidable loss of jobs for the employees. However, the company administration may look to restructure the organization and save some (or all) of the jobs in the process. But, the employees will have the right to claim dues owed to them by the company.
5. Do employees get paid when the company goes into liquidation?
If the employer goes into liquidation, there will be no business continuity and the employees will be without a job. However, the employees will have the right to claim dues (salary, allowances, etc) owed to them by the company. If there are no funds with the insolvent company to pay the employees, they can approach the National Insurance Fund (NIF) for payments due.
6. How long does liquidation of a company take?
In general, the liquidation process of a company in India can take up to 2 years to complete, since the date of application, in case of compulsory liquidation. It may take less time for a voluntary liquidation process to complete. The duration may vary from company to company, depending on the complexity of the process involved.
7. What happens after the liquidation of a company?
After a company is liquidated, the liquidator can sell its assets to repay all pending liabilities. The remaining balance, if any, after repayment to the creditors, gets distributed among the shareholders of the company.
8. Can I be a director of a company after liquidation?
Yes, you can remain a director of the company after liquidation, but, you will not have any more control over its business affairs. You can set up and be the director of a new company. But, the new company cannot have the same/similar name to the liquidated company.
9. Can a company continue to trade when in liquidation?
No. A company should not do trading activities while undergoing liquidation. This is because the directors do not have any more control over their business affairs. If the liquidator comes to know about any trading activity being undertaken by the directors, he can initiate prosecution against the directors. Exceptions: * The liquidator can allow trading if such an activity is for repaying the creditors * He will allow trading if it is for collecting the debts accrued by the business
10. Can I liquidate my own company?
No. You cannot liquidate your own company. Only the shareholders of a company can put it into voluntary liquidation. Then, a licensed insolvency practitioner will be appointed as a liquidator and only he can start the liquidation process.
11. Are directors personally liable for company debts?
Usually, directors are not personally liable for company debts. Therefore, if the company fails to pay off its debts and the creditors move court, the company assets are put to risk only and not the personal assets of the directors.
12. Can liquidation reverse?
Yes. One can reverse a Members’ Voluntary Liquidation (MVL). But, it’s not easy for the directors to do so, just by changing their minds. They can only do it by making an application to the concerned High Court and requesting an annulment of the said liquidation. The application has to be made within 6 years of the liquidation.
13. How do I claim money from a company in liquidation?
By initiating the liquidation process, the company assets are sold off by the liquidator to meet obligations and repay creditors. If you are a secured creditor, you will be at the top of the ‘payment hierarchy’ and will get the first preference while distributing the proceeds of the sale. On the other hand, if you are an unsecured creditor (suppliers, employees, and banks), you will be at the bottom of the ‘payment hierarchy’. Therefore, when you claim money from a company in liquidation, your claim will be processed by the liquidator according to your position in the ‘payment hierarchy’.
14. Can a director resign when a company is in liquidation?
Yes, he can. But, a director is not advised to resign from a company when it is under the process of liquidation. This is more so for a director if he has provided a declaration for solvency. However, if he resigns in an unavoidable situation, he doesn’t need to file the DIR-12 Form as the status of the company is ‘under liquidation’.
Food License
Who requires a Food License?
Every Food Business Operator is required to be licensed/registered under the FSSAI. FSSAI Registration is required by small businesses like hawkers, petty retailers, etc whose annual turnover is less than Rs.12 lakhs per year. All food businesses exceeding this annual turnover limit of Rs 12 lakhs per year require a FSSAI License. FSSAI State License and FSSAI Central License are issued to food businesses based on their size whether it is a medium scale or large-scale. Usually, large manufacturers, exporters, importers, etc obtain Central Licence while mid-sized entities like transporters, traders, etc need State Licence. If your business falls in any one of the below-listed categories, then a food license is mandatory for you.
- Procurement
- Manufacture
- Distribution
- Processing
- Packaging
- Storage
To be more elaborate, any individual or a company that operates with food substances from farm to plate must obtain the FSSAI food license. A more detailed list of those who require FSSAI registration Certificate is here:
- Hotels
- Wholesaler
- Restaurants
- Food chains
- Food sellers and resellers
- Dairy and dairy processing
- Food importers and exporters
- Processors like pickle and dry fruit maker
- Raw material suppliers to food businesses
- Retailers & establishments who have a retail outlet
- Simple transporters who transfer items from one location to another
- Canteens in corporations, schools, colleges, hospitals or government institutions
- Packaged food manufacturers who produce items such as biscuits and ready to eat products
Storage units and warehouses require a food safety registration instead of a production license. FSSAI license types in India According to the FSSAI Act, 2006 all food businesses are required to be registered/licenced:
FSSAI registration: This is the primary kind of food license and it is issued for:
- Businesses that are small in turnover – 12 Lakh INR approximately
- FBO that is at the budding stage like a dairy with a capacity of less than 500 ltr/day.
- Trades like tea shops, canteens, food processors and small warehouses ideally require this licence. It can be upgraded when the business begins to expand in capacity and profit.
The State Licence: Companies that have a profit greater than 12 lakhs and less than 20 Crores INR require the state license.Some examples are:
- Dairies with a capacity of over 50,000 litres/day
- Hotels with a 3-star rating and above
An exception here is the catering business. Irrespective of their turnover, they have to apply for a state license and not a basic FSSAI license.
The Central License: The above to licences were for small and mid-sized trades. The central registration is for bigger businesses. It is issued to:
- Companies that supply food to government offices and departments.
- Trades that have a turnover of over Rs. 20 Crores.
- Food import and export commerce.
Significance of FSSAI
Significance of FSSAI license number format A 14-digit food license will contain a State Code and registration. Every food package must have a label. This label should mandatorily contain:
- The logo of FSSAI
- License number