Services Provided by Chartered Accountant Firm for Winding Up of Company
Winding up of a company refers to the legal process of closing down a business, selling its assets, repaying liabilities, and removing the entity from the records of the Registrar of Companies (ROC). It may be initiated voluntarily by the shareholders or compulsorily by a Tribunal due to specific legal grounds. Given the involvement of multiple legal provisions, statutory filings, tax clearances, and stakeholder coordination, a Chartered Accountant (CA) firm plays a key role in managing the winding-up process from start to finish. Below is a serially numbered and detailed list of services provided by a CA firm in company winding-up matters:
Initial Consultation & Legal Feasibility Review
- Feasibility Analysis:
- Solvency position evaluation
- Continuation viability assessment
- Alternative options review (merger/restructuring)
- Assessment of financial position, pending liabilities, and legal status.
- Suggesting the most suitable route for closure based on compliance history and business objectives.
Advisory on Type of Winding Up
- Voluntary Winding Up:
- Initiated by the company itself when it is solvent and able to pay its debts.
- Types of Voluntary Winding Up
- Members’ voluntary liquidation (solvent)
- Creditors’ voluntary liquidation (insolvent)
- Compulsory Winding Up by Tribunal:
- Under Section 271 of the Companies Act, 2013
- Ordered by the National Company Law Tribunal (NCLT)
- Ordered in cases such as :-
- inability to pay debts,
- non-filing of statutory returns, or
- acts against national interest.
- Fast Track Exit (FTE) Scheme:
- Under Section 248 of the Companies Act, 2013
- A simplified process for defunct companies to close down quickly
- Strike Off : For companies that are non-operational
- Evaluating the implications, timelines, costs, and compliance burdens of each method.
Preparation and Certification of Financial Statements
- Preparation of audited financial statements as on the date of closure or liquidation.
- Certification of:
- No asset/liability position
- Solvency status
- Outstanding statutory dues
- Assistance in finalizing Books of Accounts and Statements of Affairs.
Declaration of Solvency & Supporting Documents
- Drafting and certification of Declaration of Solvency (for voluntary liquidation cases).
- Preparation of:
- Statement of assets & liabilities
- Auditor’s report and Board declarations
- Financial projections and valuation summary (if required)
Preparation of Resolutions and Statutory Filings
- Drafting and facilitating:
- Board Resolution for winding up
- Shareholders’ special resolution (through EGM)
- Filing of necessary ROC forms:
- MGT-14
- GNL-2
- STK-2 (in case of strike off)
- INC-28 (for tribunal orders)
Liaison with Liquidator or Insolvency Professional (if appointed)
- Coordination with appointed liquidator or insolvency professional.
- Support in submission of books, records, and claim lists.
- Advisory on duties of directors and promoters during liquidation.
Filing of Tax Returns & Closure of Tax Registrations
- Filing of pending Income Tax, TDS, and GST returns.
- Computation and payment of final tax liabilities.
- Closure of PAN, TAN, GST, IEC, and other statutory registrations.
- Assistance in obtaining tax clearance certificates (if required).
ROC & IBBI Compliance During Liquidation
- Filing of required forms with:
- Registrar of Companies (ROC)
- Insolvency and Bankruptcy Board of India (IBBI) (for voluntary liquidation)
- Filing of:
- Statement of Accounts
- Final Report
- Certificate of closure from liquidator
Asset Realization and Settlement of Liabilities
- Overseeing the sale or transfer of company assets, including property, inventory.
- Realization of receivables
- Settling outstanding debts, including payments to creditors, employees, and statutory authorities
- Ensuring proper distribution of any surplus to shareholders after liabilities are cleared.
- Verification and settlement of outstanding liabilities.
- Preparation of Statement of Distribution and liquidation bank account reconciliation.
Taxation and Financial Closure
- Preparing and filing the final Income Tax Return (ITR) for the year of closure.
- Ensuring all TDS returns are filed and outstanding tax liabilities are cleared to avoid future penalties.
- Advising on post-closure tax compliance and implications.
Handling Employee and Statutory Dues
- Finalization and settlement of:
- Employee dues (gratuity, bonus, salary)
- PF, ESI, and labour law compliances
- Filing of relevant returns and closure applications with concerned departments.
Strike Off Services under Section 248
- Advisory on fast-track company closure under Section 248 (for inactive/dormant companies).
- Drafting and filing of Form STK-2 with supporting documents:
- Indemnity bond
- Affidavit
- Board and Shareholders’ Resolutions
- Declaration of no dues, no operations, and no pending litigation.
Representation before Authorities
- Responding to notices from:
- ROC
- Income Tax Department
- GST Authorities
- Tribunal or NCLT
- Responding to queries, objections, or notices from authorities and stakeholders.
- Liaison with regulators for any show-cause hearings, clarifications, or objections.
Handling Public Notices and Objections
- Assisting issuance of public notices to invite objections from creditors, employees, or the public.
- Addressing and resolving any objections raised during the closure process.
Assistance in NCLT-Based Winding Up (Compulsory)
- Drafting of petition and related affidavits for filing before NCLT.
- Assistance in coordinating with advocates and legal counsel.
- Compilation of all statutory records, books of accounts, creditor details, etc.
Final Report & Company Closure Certificate
- Assistance to the liquidator in:
- Drafting and filing the Final Report
- Preparing Liquidation Accounts
- Filing documents with ROC and obtaining:
- Closure certificate
- Striking off from Register of Companies
Post-Winding Up Advisory
- Advisory on:
- Record retention obligations
- Director disqualifications (if any)
- Impact on group companies or subsidiaries
- Guidance for promoters looking to start a new venture.
End-to-End Support and Expert Guidance
- Providing ‘single point of contact’ for all winding-up activities – From initial assessment to final dissolution.
- Advise on the most suitable mode of winding up based on the company’s financial position, statutory compliance, and business objectives.
- Assess risks, prepare closure strategies, and help stakeholders understand implications of winding up
- Ensuring the process is seamless, compliant, and minimizes risk of future liabilities
Specialized Services for Section 8 (Non-profit) companies
- Ensuring compliance with specific rules
- Transferring remaining funds to another non-profit or the government,
- Following unique procedures for closure