Central Government to decide on winding up of small companies

The Ministry of Corporate Affairs (the MCA) vide its notification dated 24 January 2019, has notified Companies (Winding Up) Rules, 2020 ("Rules") to make the winding procedure easier for certain class of companies having small scale of business. These Rules shall come into force on 1 April 2020.

The Rules have replaced the approval authority from National Company law Tribunal (NCLT) to Central Government for the cases where as per latest audited balance sheet, the Companies which have not accepted deposits exceeding INR 25 lakhs or having turnover less than INR 50 Crores and have not accepted loans more than INR 25 lakhs and have laid down the procedures for liquidation of such companies. 

With the introduction of the Rules, the procedure of winding up for small companies will become easier without much complexities as they can proceed under the Companies Act 2013 without filing any petition to NCLT.

 

Source: http://mca.gov.in/Ministry/pdf/Rules_28012020.pdf

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