Voluntary Liquidation / Strike-off Company

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Voluntary Liquidation / Strike-off Company

Liquidating or striking off a solvent business requires a structured and legally sound approach. At AMG Corporate Avenues LLP, we help companies initiate and complete the voluntary liquidation process in full compliance with the Insolvency and Bankruptcy Code (IBC), 2016 and applicable corporate laws.

 

  • From board resolution to closure, we handle it all
  • Ensure compliance with the Insolvency and Bankruptcy Code (IBC), 2016
  • Transparent, well-documented execution with regulator coordination
  • Minimize delays and risks with expert legal oversight

What is Voluntary Liquidation?

Voluntary liquidation is the process of closing a solvent company through a formal legal route. Unlike compulsory liquidation initiated by creditors or the tribunal, voluntary liquidation is undertaken at the company’s own discretion when it has no outstanding debts or has repaid all liabilities.

Under Section 59 of the Insolvency and Bankruptcy Code (IBC), 2016, any company that is solvent and not being liquidated due to insolvency may voluntarily liquidate its operations by appointing a liquidator and following due process. Its objective is to settle all liabilities and then distribute the remaining assets among the shareholders.

Reasons for Voluntary Liquidation

  1. Strategic Exit or Business Restructuring
    When companies plan mergers, acquisitions, or restructuring, certain legal entities may become redundant and are best liquidated.

     

  2. Completion of Business Purpose
    Entities formed for specific projects or joint ventures may choose to dissolve after successful completion.

     

  3. Shareholder Resolution
    The company’s shareholders may collectively decide to cease operations and liquidate the entity.

     

  4. Avoid Future Liabilities
    Dormant companies often opt for voluntary liquidation to avoid future compliance costs or unanticipated liabilities.

     

  5. Non-Operational Status
    Businesses that are no longer trading and have no plans to resume may find liquidation more cost-effective than ongoing compliance.

Process of Voluntary Liquidation

Agreements serve as the groundwork for defining intent, protecting interests, and creating the foundation for future contractual relationships. Here are the primary types of legal agreements we offer:

Board Meeting & Declaration of Solvency

The Board of Directors must pass a resolution proposing voluntary liquidation. A declaration of solvency must be executed by the majority of directors, stating the company is capable of repaying all debts.

Special Resolution by Shareholders

Within four weeks of the board resolution, shareholders must approve the liquidation by a special resolution.

Appointment of an Insolvency Professional as Liquidator

An Insolvency Professional (IP) registered with IBBI is appointed as the liquidator to carry out the process.

Public Announcement and Communication to Authorities

A public notice is published inviting claims from creditors. Notifications are sent to ROC, IBBI, and other applicable regulators.

Settlement of Claims & Asset Realization

The liquidator verifies claims, settles liabilities, and sells any remaining assets, if applicable.

Distribution to Shareholders

After all debts and expenses are cleared, the surplus is distributed among shareholders.

Preparation of Final Report & Filing with ROC

The liquidator drafts a final report and submits it to the Registrar of Companies with a formal request to dissolve the company.

Company Dissolution

The ROC issues a notice confirming the company has been struck off and dissolved.

Documents Required for Voluntary Liquidation

  • Board Resolution for Liquidation
  • Declaration of Solvency by Directors
  • Audited Financial Statements of the Company
  • Shareholders’ Special Resolution
  • Appointment Letter of Insolvency Professional
  • Statement of Assets and Liabilities
  • List of Creditors and Proof of Claims
  • Final Report by Liquidator
  • Bank Account Closure Proof
  • Application to ROC for Dissolution

Why Choose AMG Corporate Avenues LLP for Voluntary Liquidation?

Regulatory Compliance

Winding up a company through the proper legal framework ensures compliance with IBC and Company Law provisions.

Clear Closure

Voluntary liquidation offers a clean break, removing the company from statutory records and reducing legal risk.

Credibility Preservation

Voluntarily closing a solvent company signals responsible corporate conduct and maintains promoter credibility.

Cost-Efficient

Voluntary liquidation is faster and more cost-effective than facing penalties or undergoing compulsory winding-up.

Control Over the Process

The company retains the power to initiate and oversee the liquidation rather than being subject to court-directed action

Why Choose AMG for Your Contracts & Agreements

Expert Legal and Insolvency Advisory

We bring a deep understanding of IBC, Companies Act, SEBI, FEMA, and ROC compliance, ensuring seamless execution.

End-to-End Process Handling

From drafting resolutions to filing the final application for dissolution, we manage everything with transparency and timelines.

Registered Liquidator Network

We work with licensed Insolvency Professionals registered with IBBI to ensure the legal standing of the liquidation process.

Customised Documentation & Reporting

We draft, verify, and file all documents—tailored to your corporate structure and business goals.

Advisory on Exit Strategy

We guide promoters and directors on the most efficient and compliant way to exit without exposure to future risks.

Frequently Asked Questions (FAQs)

Yes, but only if the company can repay all debts within 12 months, and directors must provide a declaration of solvency.

Typically, it takes 6 to 12 months, depending on the size of the company and the complexity of the assets and claims.

Yes, the appointment of a licensed liquidator registered with IBBI is a legal requirement under IBC.

Yes, a solvent company that has no plans to continue operations can opt for voluntary liquidation.

Once dissolved, the company ceases to exist as a legal entity and is removed from all statutory registries, including the MCA.

Yes, LLPs can also undergo voluntary liquidation, subject to compliance with the LLP Act and IBC provisions.