A company which is not in operation is required to be closed in order to avoide the unneccesary annual return requirements of Registrar of Companies, which will include spending time and money. One other reason of winding up of an unoperational company is to release the assets and investments made in it.
A Company can be wound up by the Tribunal in following cases;
1. The company is not in a position to settle its debts.
2. The company by passing a special resolution resolved that the company be wound up by the Tribunal.
3. The company has done somthing against the general public and Integrity of India, State Security, Morality etc.
4. By the order of the Tribunal under chapter XIX.
5. The company has failed to file its annual financial statements for the preceding five consecutive years.
6. If the Tribunal thinks that its justifiable and equitable to wind up the company.
7. If the company is working for a fraudulant or unlawful purpose or its management is guilty of fraud or misconduct etc., and its equitable to wind up the company.
B. Voluntarily winding up of the company
A company can be wound up voluntarily in following cases;
1. If the company passes a resolution in its general meeting that the company be wound up voluntarily as a result of expiry of the period fixed by its article of association or on the occurence of any event specified by its articles of association.
2. If the company passes a special resolution for winding up of the company.