In a bid to ease the process of business liquidation, the Ministry of Corporate Affairs (MCA) announced its latest set of rules in a notification dated 24th January 2020. These rules shall come into force on 1st April 2020.
The new procedures are reported to allow the small firms in winding up their businesses without taking approval.
As per reports, the new MCA guidelines cover the liquidation policy of companies with the following criteria: Paid up capital not exceeding INR 1 Crore; Non acceptance of deposits over INR 25 Lakh; Turnover upto INR 50 Crore; Loan under INR 25 Lakh.
According to the new procedures, instead of the tribunal, the central government will provide the approvals to the companies falling under the above criteria for liquidation of their businesses. The rule states that the word ‘tribunal’ mentioned anywhere in the present procedures should be read as the ‘Central Government’. The procedure is therefore required to be followed as per the orders of the Central Government, as and when issued.
You can download the MCA notification here.