What is Closing Private Limited Company Overview
If your business in the private limited company is not running properly or faces continuous losses, it is better to close such private limited company and look for a new beginning. A private limited company needs to be closed or windup when there are no exchanges or the Directors of company are not willing to proceed its operations. A private limited company generally can be shut by both voluntary and compulsory circumstances.
Process for Closing Private Limited Company
01
Step 1
Complete our Simple Form
02
Step 2
Drafting Affidavit
03
Step 3
Filing Financial statement
04
Step 4
Document Submission
05
Step 5
Complete
Documents Required For Closing Private Limited Company
- Approved resolution in Board of Directors meeting.
- There should be no business activity since the day 2 years from when resolution is passed
- Declaration by members stating there is no debt pending on company and the required forms/Compliances are filed
- Affidavits from Directors and Members/Indemnity Bond
- List of creditors along with their Consent if any
Benefits Of Closing Private Limited Company
- Drafting Documents
- eforms filing
- ROC follow ups
- Statement of Account Preparation and Board Resolution Creation
- Registration Fee
FAQs On Closing Private Limited Company
It can be filed only when the company repays or extinguishes all its liabilities and receive a No Objection Certificate (NOC) from the creditors before filing the closure application. And conduct a meeting where all the directors decide upon the closure by signing a special resolution or a consent of seventy-five percent members regarding paid up share capital.
The Registrar of Companies can remove the company name from the list of companies if, he has reasonable cause to believe that:
After filing the application with the Ministry of Corporate Affairs, it takes about 90 days for striking off the Company from MCA records. On approval for strike-off by RoC, the notice of strike-off is published on its website to open for any objection or representations by third parties.
RoC will publish a list of companies struck off in the Official Gazette. The Company under fast-track exit mode will be considered closed from the date of publication of the notice in Official Gazette.
The closing documents have to be filed within 30 days from the date of signing of the assets and liabilities statement.
It is necessary to intimate the Registrar for the closure of Private Limited Company to update the MCA data and make company free from all its legal compliances.
Fast Track Exit is a scheme introduced by the Ministry of Corporate Affairs (MCA) for inactive companies to wind up and get their names struck off from the MCA record with lesser formalities.
In case the company is struck off due to its default, then it would have to apply to the National Company Law Tribunal for changing the status of the company from strike off to active by giving valid reasons for the fault.
Our advice is to file all pending annual return and balance sheet as non-filing the same is a penal offense with severe consequences. Though at the time of filing an STK-2 Form for winding up there is no requirement to attach or furnish information on past annual compliance, However, if the company gets wound up, you would lose any opportunity to file the pending forms. So far ITR is concerned, like any other tax assessee, you must pay taxes due and file ITR before proceeding for closure. However, in case the business could not commence, or no bank account was ever opened, these may be avoided at your own cost and consequence.
The disqualification of a director makes him ineligible for holding the office of a director even for a second. Every company must function with at least two directors at all the time. In case the disqualification of any director brings down the statutory limit of two directors then the ideal way is to call for an EGM and appoint a new director in the place of the disqualified director. The Companies Act provides six months of time to the company to fill the vacancy caused in the directorship. Once the directorship is regularised the company can close itself in the usual manner.
A company can be closed with the majority decision of 75% shareholding in the company. If the dissenting person has a stake of more than 25%, then the company cannot be closed by filing the STK-2 method, which is also referred to as the voluntary method of company winding up. To close a company with dissenting members, an application may be moved before the NCLT under IBC 2016.
Our advice is to file all pending annual return and balance sheet as non-filing the same is a penal offense with severe consequences. Though at the time of filing an STK-2 Form for winding up there is no requirement to attach or furnish information on past annual compliance, However, if the company gets wound up, you would lose any opportunity to file the pending forms. So far ITR is concerned, like any other tax assessee, you must pay taxes due and file ITR before proceeding for closure. However, in case the business could not commence, or no bank account was ever opened, these may be avoided at your own cost and consequence.
The stamp duty execution on documents like affidavit and indemnity bond is levied by the state government, which differs from state to state. You may find the stamp duty rates by referring to particular state government stamp act, or by inquiring from the stamp vendors. For any assistance, you may also call our customer care number at + 91-9318423934 or drop a mail at support@meraprofit.com
In case the company is struck off due to its default, then it would have to apply to the National Company Law Tribunal for changing the status of the company from strike off to active by giving valid reasons for the fault.
