Making it easier for small firms to close their businesses without going to a tribunal, the Ministry of Corporate Affairs has notified the rules for winding up of companies under the companies law, which would be effective from April 1. Petitions for winding up of companies are subject to various conditions, including thresholds on turnover and paid-up capital.
The final rules will be available to companies that have assets of book value not exceeding Rs 1 crore; and have not taken deposits beyond Rs 25 lakh or have no secured loans beyond Rs 50 lakh or turnover beyond Rs 50 crore or paid up capital beyond Rs 1 crore.
Besides, as per the rules, the closure of the company will be carried out by the official liquidator hired by the government, who will take charge of the assets and deal with the claims of the company. If the liquidator finds any fraud having been committed by shareholders, directors or other officials of the company, the government may order a probe.
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