Closure Of The Company

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Closure Of The Company

Closure Of The Company

Every company is incorporated with a vision of reaching heights in its business operations. But in the chain of uncertain circumstances sometimes it is found favorable to close the operations of the company and dissolve it.

Closure Of The Company/ Winding up of a Company?

In simple terms, Winding up a company means bringing an end to the life of the company where the company ceases to carry on its business operations and all its assets and liabilities are realized and amounts owed to the creditors are paid off.


In order to bring an end to the life of the company there are the following paths:-


Strike off of a company is a fast and cost-friendly path to wind up the operations of the company. Any Company desirous of getting its name struck off from the Register of Companies can apply to the Registrar of Companies in the prescribed form. 

A company can be struck off on the basis of the following grounds:

  • The company failed to commence its business within one year of its incorporation (or)
  • The company is not carrying any business activity for the preceding two financial years and no application is made to obtain the status of the dormant company.

Provided that such application for strike off can be made only after adhering to requirements as prescribed under The Companies Act, 2013 which includes:-

         The procedure of Strike off:

  • The Company holds a Board Meeting and passes a board resolution for strike off of the company and authorizes one of the director or company secretaries to issue a notice of the general meeting.
  • Notice of the general meeting in writing is issued along with the required explanatory statements.
  • A special resolution is passed in the general meeting held for the purpose of striking off the company and form STK-2 along with prescribed attachments and form MGT-14 is filed with the Registrar within 30 days of passing of the special resolution.
  • The Registrar after examining the application filed for strike off if satisfied passes the order of strike off of the company and the name of the company is removed from the register of companies.

Also, the Registrar of Companies may suo moto strike off the name of the company from the Register after giving an opportunity of being heard to the company.


A Company can be wound up through two modes:-

  1. Voluntary Winding Up: 

Voluntary Winding Up of the Company can be done by Creditors or Members of the company. Voluntary Winding Up of the company takes place under the following circumstances:-

  • When the duration for which the company was incorporated is completed
  • When the object for which the company was incorporated gets fulfilled.
  • When the company resolves at any general meeting to be voluntarily wound up.
  1. Compulsory Winding Up:

Compulsory Winding Up of the Company takes place when the National Company Law Tribunal finds it just & equitable to wind up the affairs of the company. Provided that, an opportunity of being heard is given to the company to state why the affairs of the company should not be wound up.

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