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At times certain circumstances require closure of business. Just like there is a process for incorporating a company, a procedure for closing of the company has been enacted and is required to be adhered to.
Companies can be closed in two ways:
1. Strike off
2. Winding-up
Striking off the name of the company is cost effective of the two methods.
Section 248 of The Companies Act, 2013 provide for striking off the name of the company. Upon strike-off, the company will cease to exist and cannot perform any operations thereafter except for discharge of any existing liabilities or obligations, its certificate of incorporation shall deem to be cancelled and the name of the company would be made available for new companies to use.
Some of the most common reasons for a firm to declare bankruptcy include:
The liquidation plan refers to selling off a company's assets before shutting down operations. The corporation may start the liquidation process and liquidate its assets to fulfill debts and commitments.
When a firm has assets and liabilities, there must be a more involved winding-up procedure followed. Companies with little or no external liabilities prefer striking off since it is a much easier process
No, you cannot liquidate your own company. A liquidator is a person chosen by the court to oversee and manage a company's winding-up process.
A firm's name is removed from the company registration when it is dissolved and liquidated. The name can be made accessible for future usage to other companies.
