{"id":6259,"date":"2019-01-02T10:17:15","date_gmt":"2019-01-02T04:47:15","guid":{"rendered":"https:\/\/golocalclassified.com\/article\/?p=6259"},"modified":"2019-01-02T10:17:15","modified_gmt":"2019-01-02T04:47:15","slug":"knowing-from-the-corporate-lawyers-in-india-how-to-close-a-business","status":"publish","type":"post","link":"https:\/\/golocalclassified.com\/article\/knowing-from-the-corporate-lawyers-in-india-how-to-close-a-business\/","title":{"rendered":"Knowing From The Corporate Lawyers In India How To Close A Business"},"content":{"rendered":"<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Running a business comes with several challenges, and a business may have to shut down suddenly when things do not work. Several reasons may be behind the closure of a business. Businesses may close in the following manner.<\/span><\/span><\/p>\n<ul>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">A company may wind up voluntarily<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Businesses may be forced to shut down<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Closure of defunct companies<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Owner may sell the business<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Selling the company<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">A company may decide to sell its assets and it can do so by selling the shares or the majority shareholding of the company. It may not be closure of the business in the real sense, but the stakes are to be transferred to another entity or individual, and the primary shareholder no longer holds the stocks and the responsibilities.<\/span><\/span><\/p>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><a name=\"__DdeLink__361_1733104106\"><\/a> <span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Winding up mandatorily<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><a name=\"_GoBack\"><\/a> <span style=\"color: #000000;\"><span style=\"font-size: medium;\">The companies in this country registered under the Companies Act may have to close compulsorily when they commit unlawful acts or resort to actions that are fraudulent. Read the following points to know the procedure for closure.<\/span><\/span><\/p>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Filing a petition<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">It is necessary to file a petition after consulting with the <\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>corporate lawyers in India<\/b><\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"> and the following can exercise the right of filing a petition.<\/span><\/span><\/p>\n<ul>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Trade creditors of the company <\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">The company<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Contributions of the company<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">State or Central Government<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Registrar of the companies<\/span><\/span><\/p>\n<\/li>\n<\/ul>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Petition must accompany the state of the affairs of the company<\/b><\/span><\/span><\/p>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">The documents included with the petition must be audited by a practicing Chartered Accountant and the opinion of the auditor is important. The petition should be advertised in a newspaper for about a fortnight and the language must be regional and English. It must be carried out under Form 6.<\/span><\/span><\/p>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Moving the tribunal<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">You will require Form 11 for completing the formalities of closure. You have to consult <\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>lawyers in India<\/b><\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"> to track the procedural formalities for closing the company. The following are the procedures to be carried out as part of the tribunal.<\/span><\/span><\/p>\n<ol>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Submission of the accounts statement that are completely audited to date.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Providing the time, date, and place for the liquidator.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Surrendering the assets and the documents related to it.<\/span><\/span><\/p>\n<\/li>\n<\/ol>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">When the tribunal finds out that the accounts of the company are updated and completed, and all the other compliances are satisfied, it can pass the order for the dissolution of the company. The procedure may be completed within sixty days of receiving the application. As soon as the tribunal passes the order, the registrar can issue a notice to the authorities stating the dissolution of the company.<\/span><\/span><\/p>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Steps for voluntary closure<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">When a company decides to wind up voluntarily, the following steps are to be followed.<\/span><\/span><\/p>\n<ol>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">It is necessary to convene a meeting with one or two Directors of the company or a majority of Directors. Furthermore, a resolution is to be passed after the Directors declare that the company has no debts from the proceeds of the assets sold as part of the decision to wind up voluntarily. It is also essential to fix a time, date, and place for convening a General meeting of the company about five weeks after the Board meeting.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">Issuing notice in writing for calling the General meeting of the company in which the proposal to dissolve the company is to be put forth along with suitable explanations. Consulting <\/span><\/span><a href=\"https:\/\/www.ahlawatassociates.com\/area-of-practice\/corporate-commercial-law\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>corporate lawyers firm in India<\/b><\/span><\/span><\/a><span style=\"color: #000000;\"><span style=\"font-size: medium;\"> can help the companies strengthen their decision to dissolve. A resolution about the decision to dissolve the company is to be passed by the majority of the attendees in the General Meeting or about three-fourth of the members must adopt a special resolution. The procedure to wind up the company must begin from the date of passing the resolution.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">After the General Meeting, another meeting is to be held with the creditors for dissolving the company. If the company fails to meet the liabilities, then the company can be easily dissolved by the tribunal.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">After ten days of passing the resolution, a notice is to be filed for appointing a liquidator and within a fortnight of passing the resolution, an advertisement is to be given in the daily journal for circulation of the copies in the district of the registered office of the company.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"> <span style=\"font-size: medium;\">A final General Meeting is to be held to file a copy of the accounts and also to file an application to the Tribunal for passing an order for the dissolution of the company.<\/span><\/span><\/p>\n<\/li>\n<li>\n<p lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">When the registrar receives a copy of the order passed by the tribunal, the dissolution of the company is declared.<\/span><\/span><\/p>\n<\/li>\n<\/ol>\n<h2 class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>Dissolution of a defunct company<\/b><\/span><\/span><\/h2>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">A company gains the status of defunct according to the Companies Act. When such companies decide to wind up, certain assistance or relief comes from the government of this country as no financial transaction takes place between this company and the rest. Usually, these companies dissolve through a fast-track procedure which requires the submission of the STK-2 form. This form is to be filled with the Registrar of Companies, and it is to be duly signed by the Director of the company. The <\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"><b>corporate lawyers in India<\/b><\/span><\/span><span style=\"color: #000000;\"><span style=\"font-size: medium;\"> can offer the best guidelines to these companies before they decide to wind up and follow the procedures related to it. The defunct companies do not have any assets or liabilities and do not commence business activity after its registration. <\/span><\/span><\/p>\n<p class=\"western\" lang=\"en-US\" align=\"justify\"><span style=\"color: #000000;\"><span style=\"font-size: medium;\">The companies must follow the legal steps in the properly before the final dissolution.<\/span><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Running a business comes with several challenges, and a business may have to shut down suddenly when things do not work. Several reasons may be behind the closure of a business. Businesses may close in the following manner. A company may wind up voluntarily Businesses may be forced to shut down Closure of defunct companies [&hellip;]<\/p>\n","protected":false},"author":1306,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[2687,2685,2686],"class_list":["post-6259","post","type-post","status-publish","format-standard","hentry","category-law","tag-corporate-lawyers-firm-in-india","tag-corporate-lawyers-firm-india","tag-corporate-lawyers-in-india"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/posts\/6259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/users\/1306"}],"replies":[{"embeddable":true,"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/comments?post=6259"}],"version-history":[{"count":0,"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/posts\/6259\/revisions"}],"wp:attachment":[{"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/media?parent=6259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/categories?post=6259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/golocalclassified.com\/article\/wp-json\/wp\/v2\/tags?post=6259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}