Companies Act Section 365

Companies Act, Section 365: Order of Dissolution of Company

Section 365 of the Companies Act, 2013 provides the final step in the process of winding up a company its legal dissolution. This section outlines the procedure to be followed by the Official Liquidator, the Central Government, and the Tribunal, leading to the removal of the company's name from the Register of Companies and the issuance of a public notification confirming the dissolution.

The dissolution of a company marks the legal end of its existence as a corporate entity, and this section ensures that such dissolution is carried out in a formal and lawful manner based on a conclusive report from the Official Liquidator.

1. Submission of Final Report by the Official Liquidator

Once the Official Liquidator is satisfied that all necessary tasks have been completed in relation to the winding up of the company including:

Disposal of all assets, Settlement of liabilities and claims, Recovery of dues, and Distribution of any remaining funds in accordance with the applicable laws, he is required to prepare and submit a final report confirming that the company has been fully and finally wound up.

The submission of this final report depends on whether or not the matter had previously been referred to the Tribunal under sub-section (4) of Section 364:

If no reference was made to the Tribunal, then the Official Liquidator must submit the final report to the Central Government only.
If a reference was made to the Tribunal under Section 364(4), then the final report must be submitted to both the Central Government and the Tribunal.
This step ensures that the relevant authority or authorities are formally notified that the winding-up process has been completed in full compliance with the legal requirements.

2. Order of Dissolution by Central Government or Tribunal

Upon receiving the final report from the Official Liquidator, the Central Government, or where applicable, the Tribunal, shall evaluate the contents of the report. If satisfied that the company’s affairs have been fully and properly wound up, and there are no outstanding matters requiring attention, the competent authority will issue a formal order declaring the dissolution of the company.

This order serves as the official declaration that the company has ceased to exist as a legal person and that it has been dissolved in accordance with the law.

3. Striking Off of Company’s Name and Public Notification

Following the issuance of the dissolution order under sub-section (2), it is the responsibility of the Registrar of Companies (RoC) to give effect to the dissolution. The Registrar shall:

Strike off the name of the company from the Register of Companies, thereby removing it from the official record of existing corporate entities in India.
Publish a notification confirming the dissolution and striking off of the company’s name. This notification is usually published in the Official Gazette to inform the public and stakeholders that the company no longer exists as a legal entity.
The publication of this notification is a vital step in ensuring transparency and public awareness regarding the legal closure of the company.