A company may be wound up voluntarily under the following circumstances −
● An ordinary resolution is passed in the general meeting of the company on the context of winding up −
ü If the period pre-fixed by the articles of association of the company has been expired.
ü In case of an event according to the articles of association of the company, under which the company needs to be dissolved.
● If a special resolution is passed by the members of the company for the voluntary liquidation of the company.
● A minimum notice of 21 clear days must be given in order to convene a general meeting.
● However, with the consent of the members, a general meeting can be convened with a shorter notice.
● A voluntary winding up is commenced just after the above mentioned resolution has been passed.
● The notice for the beginning of the winding up of a company must be made in an official gazette, i.e., by applying to the registrar of companies within 14 days of commencement of the liquidation.
● Again, the notice of the winding up of the company must be published in a newspaper in the place where the registered office of the company is situated.
● The company becomes unable to conduct any commercial business activities after the commencement of the winding up.
● However, business can be conducted for the benefit of the company’s winding up process, i.e., paying debts to the company’s creditors, etc.
● The corporate state and its corporate power continue to remain in existence until the company is finally dissolved.
● Further, there two kinds of voluntary winding up −
ü Members voluntary winding up
ü Creditors voluntary winding up
● The rules for both kinds of winding up are the same.
● The Companies Act however provides some specific criteria for these two types of winding up.
