Close A Private Limited Company

An inactive or defunct company may be closed quickly by making an application in Form STK-2 to the ROC for striking off the company by the ROC. Close your Private Limited Company and stop complying with routine compliances

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Process to dissolve a Private Limited Company

We will collect all the necessary data and documents from you.​

Drafting of affidavit & indemnity bond

Closure application filed

How to close A Private Limited Company?

The private Limited Company commences the liquidation process to terminate its operations. Various factors, such as insolvency or a lack of willingness to continue business activities, prompt a private company to wind up. Liquidation involves selling the company’s assets to settle its obligations and repay debts. Upon completion of liquidation, the company is dissolved, ceasing to exist. Failure to meet compliance requirements may result in fines, penalties, or director disqualification from establishing another entity. Hence, it’s prudent for a company to wind up promptly upon becoming inactive or insolvent. Company liquidation entails halting all business activities, selling assets to clear debts, and distributing remaining assets among shareholders. According to Section 270 of the Companies Act 2013, a private company can opt for winding up either through the National Company Tribunal (NCT) or voluntarily.

Reasons for winding up of a Company

Ways of Closing of a Company

According to the Indian Companies Act of 2013, striking off and winding up are distinct procedures employed for the closure of a company, encompassing those incorporated under its provisions

1. Winding up

Winding up, on the other hand, is a more complex and formal process that involves the liquidation of a company’s assets and the distribution of its liabilities among its creditors and shareholders. Winding up can be initiated voluntarily by the members or creditors of the company, or by an order of the National Company Law Tribunal (NCLT) in case of default or non-compliance with the provisions of the Companies Act. Winding up is a more formal and time-consuming process than striking off and involves more legal formalities.

2. Striking off

Striking off is a simpler and quicker process that can be used when a company is inactive or dormant. This process involves removing the name of the company from the Register of Companies maintained by the Registrar of Companies (ROC). A company may apply for striking off voluntarily or the ROC may initiate the process if it has reasonable cause to believe that the company is not carrying on any business or operation. Striking off is generally a more cost-effective and faster process than winding up.

Documents Required

Why to close A Company

After Liquidation, Freed from Obligations and Debts: Once the liquidation is complete, all obligations and pressure are removed from the Company’s officials, including the Director

Preventing the Firm from being sued: The directors of the company can escape legal action if they voluntarily adopt the resolution to wind up a private limited company

The Low Price Need for Liquidation: Because the costs are based on the sale of assets, the cost of a liquidation process is quite minimal

Favors for the Creditors: The Company’s liquidation will benefit the creditors after a protracted battle because they are entitled to a default payment for all of the credits provided by all of the creditors.

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Frequently Asked Questions

Can Registrar of Company also initiate strike-off?

The Registrar of Companies can remove the company name from the list of companies if, he has reasonable cause to believe that:
● A Company failed to commence its business within one year of its incorporation; or
● A company is not carrying on any business or operation for two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.

Are Financial statements and annual returns filings mandatory for company closure?

A company’s Financial statements and annual returns in forms AOC-4 and MGT-7 need to be filed for the financial years during which the company was active.

How can you restore a struck-off company?

To restore a struck-off company, an appeal against the order of ROC has to be made in the NCLT within 3 years from the date on which the notice for strike-off was published in the official gazette by the ROC.

Can a struck off company still trade?

When a company is struck off, the name would be removed from the company register and it can not trade, sell its assets or make payments or even it can not get involved in any other business activities.It is similar to a PAN Card number.DIN is to be mentioned in documents while appointing a person as a director of a company.

What are the grounds for striking off the company? In what conditions the Company’s name cannot be struck off?

The company can be struck off under the following circumstances:

When a company has failed to commence its business within one year of its incorporation.
When a company is not actively carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such a period for obtaining the status of a dormant Company.