Voluntary winding up occurs when shareholders decide to dissolve a solvent or insolvent company.

Members’ Voluntary Winding Up (Solvent Company)

• Directors must declare solvency via affidavit within five weeks before passing the resolution.

• Latest financial statements and statement of assets & liabilities must be filed with ROC.

• Shareholders pass a special resolution in a general meeting (3/4th majority required).

• A liquidator is appointed to realize assets and settle debts.

• Remaining assets are distributed among shareholders.

Creditors’ Voluntary Winding Up (Insolvent Company)

• Pass a winding up resolution in the general meeting.

• Hold a creditors’ meeting; if two‑thirds of creditors approve, appoint a liquidator.

• Form a Committee of Inspection (if required) to oversee liquidation.

Step‑by‑Step Voluntary Procedure:

1. Board meeting: Directors declare solvency (if applicable) and schedule a general meeting within five weeks.

2. Issue notice: Notify all members and creditors about the general meeting.

3. General meeting: Pass the resolution (ordinary for creditors’, special for members’ voluntary).

4. Creditors’ meeting: Convened after the general meeting; if two‑thirds of creditors disapprove, winding up cannot proceed.

5. ROC notification: Inform Registrar of Companies within ten days of resolution.

6. Liquidator appointment: Registrar appoints a liquidator to manage asset realization and debt settlement.

7. Liquidator’s report: Liquidator prepares a report and final accounts; call a final general meeting.

8. Tribunal review: Liquidator submits the report to NCLT within 14 days; NCLT issues a dissolution order within 60 days.

9. ROC filing: Liquidator forwards the dissolution order to ROC within 30 days.

10. Official Gazette notification: ROC publishes the final winding‑up notice in the Official Gazette.

Compulsory winding up is ordered by NCLT when a company is involved in unlawful or non‑compliant activities.

Eligible petitioners:

• The company itself

• Registrar of Companies (ROC)

• Creditors

• Central or State Government

• Shareholders or contributors

Procedure:

1. Filing of petition: Submit a winding‑up petition to NCLT or court along with a detailed Statement of Affairs.

2. Review of petition: Tribunal scrutinizes the petition; if valid, it accepts and proceeds.

3. Liquidator appointment: Tribunal appoints a liquidator to take control of assets and liabilities.

4. Execution of assets: Liquidator reviews financial records, realizes assets, and drafts a liquidation report.

5. Committee review: Draft report is submitted to the Winding‑Up Committee for review and approval.

6. Final report submission: Approved report is filed with NCLT or court for issuing a dissolution order.

7. ROC filing: Liquidator files the Tribunal’s dissolution order with ROC within 30 days.

8. Strike‑off from register: ROC formally strikes off the company’s name from its records.

9. Gazette notification: Final winding‑up notice is published in the Official Gazette, confirming closure.

Effective from April 1, 2020, under the Companies Act, 2013, these rules standardize formats and procedures for winding up by tribunal (Section 271) and the summary procedure (Section 361). They ensure compliance by providing clear guidelines for petitions, liquidation reports, and timelines.