The decision to close a company is one made by a company's
leadership and occurs in consensus with management and
shareholders. A business normally resorts to winding up business
operations when it is unable to discharge its liabilities, is
insolvent or has fulfilled its objectives as mentioned in its AOA.
Since this process essentially means cashing out the business, it
is known as voluntary liquidation. Once the winding-up proposal
gets a 75% majority from its board of directors and shareholders, a
special resolution is passed, followed by a publication in the
Official Gazette and the city's leading newspapers. This
initiates the process of liquidation.
Procedure
Chapter XX of the Companies Act, 2013 lays down the procedure
for winding up a company. However, the eleventh schedule of the
Insolvency and Bankruptcy Act, 20161 omitted voluntary
winding up, which was laid down under sec 304 to 325 of the 2013
act. As a substitute for the omitted provision, chapter V
