Close a Private Limited Company

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ABOUT THIS PRACTICE

Option of closure is considered when the company owners or directors decide to terminate or wind up the business. Most feasible or simplest way to shut a company is by striking off its name from Register of Companies. This is recommended when a company remains non-functional for a certain period. Other options include a winding-up petition, however that requires more time, investment and compliance.

Once the strike off is approved , the company’s name is removed from the register and thus, in the eyes of laws it no longer exists .Before, proceeding for the strike-off application the company must satisfy all the compliances. The application is supported by various documents and needs help from the professional.

Ways of closing of a company in India

Winding up: When the company is in the operative stage and has assets and liabilities winding up option is preferred. It will consist of approval from Members, Directors, and creditors. To oversee the company’s affairs during the whole process it is required to appoint a liquidator for the said process . It is mostly a time-taking process.
Striking off: A company that has comparatively no or less outside liabilities prefers the process of striking off. In case of a company being inoperative since its establishment or in the past two years, it is eligible to apply for strike-off and this is often referred to as fast-track exit. The foremost situation is the company having no assets or liabilities and has complied with all the applicable provisions.

Documents Required

Incorporation Documents: Company’s MoA – AoA, Certificate of Incorporation, PAN card and other registration certificates
Accounting Information: The financial statement of the Company for the most recent year, prepared prior to 30 days of filing the application.
Details of Activity: Details whether the company has been operative for any period. If yes, since when the operations are discontinued.
Legal Liabilities: A statement regarding pending litigation's, if any involving the company.
NOC from Creditors: The company must provide NOC for closure from creditors, if any (Draft to be provided by Legal Nestors experts)
NOC from Regulatory Bodies: NoC for closure to be obtained from Income Tax Department, SEBI, RBI, etc. if relevant.