Upgrad LLM

winding up business


I just wanted to know the what is procedure for winding up a business in properitor ship, and what is the procedure for surrender of pf , esic , professional tax and other licence . 

Corporate Lawyer

Sole Proprietorship is not a legal entity and it is not regulated by any statute, therefore there is no prescribed procedure of its winding up and sole proprietor can wind up his business as and when he wants. On deciding to windup the business affairs, he has to pay out the liabilities of the business, out of funds generated by the business and out of his personal assets, in case it is not possible for the sole proprietor to pay off all his liabilities, than he can apply for necessary insolvency under the provisions of the Insolvency Act and thereafter the manner of payment of debts will be decided by the court.

You will have to apply to the concerned authorities for surrender of the licences as per procedure envisaged and pay the dues, if any.

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