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Closure Of Pvt Ltd Company

23950* Basic Package

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Overview

Closure of a Private Limited Company

Running a Private Limited Company comes with its own compliances. A private limited company is an artificial judicial person. It requires meeting various compliances to run smoothly. It includes compliances like:

1) Appointment of an auditor, 

2) Regular filing of tax returns, 

3) Annual filings, and many more. 

If you fail to meet all these compliances, it could lead to penalties, fines, or disqualification of the directors from another incorporating company. Thus, if a private limited company is inactive and makes transactions from the past few months, it would be best to wind up the Company. 

Voluntary closure of Private Limited Company:

You can initiate the voluntary closure of your private limited Company anytime. The stakeholders of the Company will initiate it. If there are any creditors, employees on a roll, then you must settle all the dues. Once after settling the dues, in the next step, the bank accounts should be closed. Finally, the private limited companies have to standardize any over dues compliances like:

1) Income tax returns

2) Annual filing 

3) Surrender of the GST registration 

Once you clear all the above activities, you can surrender your registration and file the wind-up petition. The closure/ wind up petition is filed with the ministry of corporate affairs. Winding up a company can be done within 10-14 business days. However, the entire step from the initial point takes 3-6 months. It could also differ in each case. 

Closure of a company by the tribunal

Any individual can close a private limited company for various reasons. it includes various reasons like:

1) Loss in business

2) Bankruptcy

3) Death of promoters and many more

The closure of a company can either be initiated voluntarily by the stakeholders of the tribunal.

Circumstances in which the tribunal can close the Company

Under the provisions made under the Companies Act, 2013, the tribunal can close a company if:

1) A private limited company is inefficient to pay its debt

2) If the Company has passed a special resolution that states the tribunal can wind up the Company

3) Any company that is acting against sovereignty and integrity of India or having friendly relations with foreign states that is against the morality

4) If the tribunal orders the closure of the Company under chapter XIX

5) Any company that fails to file financial statements, annual returns for five consecutive years

6) If the Company’s affair is fraudulent, or the Company was formed in an unlawful process

7) If the person related to the foundation of the Company is guilty  

Circumstances for voluntary closure of the Company

The members of a private limited company can also close the Company voluntarily if:

1) The Company passes a special resolution to close the Company

2) If the Company passes a special resolution in a board meeting to close the Company due to expiry of its period

3) If any decision made by the AOA due to any event that states that the Company should be dissolved. 

Things should be done before closing a company

Before winding up a company, you need to complete some steps that include:

Holding board meeting: 

Any private limited company that wants to close the Company has to hold a board meeting. In this meeting, the directors will declare that they have enquired about the internal affairs and formed an opinion to close the Company. The directors will also make sure that the Company has no debts. If there are any debts, the Company has to pay all the debts by selling the assets. They also have to fix a date, time, and agenda to conduct a general meeting from five weeks of the board meeting. 

Issuance of notice: 

Then the Company has to issue a notice in writing. It will state the information about a general meeting that proposes the resolution with a suitable explanation

Passing an ordinary resolution:  

The Company wishing to wrap up has to pass an ordinary resolution in the general meeting. 

Meeting with the creditors:

On the same day, the Company shall conduct a meeting with the creditors. If two-thirds of the creditors pass the resolution to wrap up the Company, the Company can wrap up voluntarily.

Filing a notice with the registrar:

Within ten days of passing the resolution, the Company has to file a notice with the registrar for appointing the liquidator.

Advertisement in the newspaper;

After passing the resolution, the Company has to give notice of the resolution in the official gazette and post an advertisement in the newspaper 

Then you have to pass a special resolution to wrap up the books and the papers of the Company. Once resolution is passed, the Company needs to file a copy of account and applications to tribunal for the closure of Company. If the tribunal finds your application satisfactory, they will pass an order of dissolution within sixty days. The liquidator then files a copy of the order to the registrar. After receiving the notice, the registrar will publish a notice that the Company is closed. 

 Reasons to close the Company

Avoiding compliances

A company is a legal entity that needs to comply with all the compliances. It is a juristic person established under the Companies Act. Thus, it has to abide by all the compliances. Wrapping up process can be initiated if the Company is inactive and wants to avoid compliances’ 

Avoid penalties:

If a company doesn’t file the compliances in time, it holds the liable to pay fines and penalties. Thus, it is better to wrap up the Company if it is inactive.

Low Cost:

Sometimes meeting the compliances for a company becomes hard. And become cheaper to wrap up the Company. Thus, in such cases, a company should wrap up.

Easy to wrap up:

A company that has been inactive from the past few months can be closed easily. But all the compliances that are overdue must be regularized. All the compliances must be cleared, and the registration should be surrendered. 

Fast to wind up:

Closing a company is fast. It can be done by filing an application with MCA. You can also complete the process online. 

Document Required

  • Final Books of Account
  • Final GST Return, if any
  • Board Resolution
  • Bank Statement
  • DSC
  • Bank Closure letter

Time Lines

  • (10 to 15 Days)
  • Purchase the Service
  • Upload / send the Documents
  • Discussion with expert
  • Filing of application with registrar authorities
  • Receipt of Certificate
  • Confirmation to client

Service Covered

Pricing for what you want required service

Basic

23950*
  • Expert Consultation
  • Filing of Application for winding up of Pvt Limited Company

Business

31950*
  • Expert Consultation
  • Filing of Application for winding up of Pvt Limited Company
  • DIN KYC for 2 Directors
  • Annual Return Filing for one year on MCA Portal
  • One year Income Tax Return Filing

Enterprise

34950*
  • Expert Consultation
  • Filing of Application for winding up of Pvt Limited Company
  • DIN KYC for 2 Directors
  • Annual Return Filing for one year on MCA Portal
  • One year Income Tax Return Filing
  • One Year Pending GST Return
  • Filing of GST Cancellation Application
  • Notes:
  • * This price is inclusive of all Govt filing fee and excluding GST amount.
  • 1. Stamp paper and notary charges to be paid as additional on actual basis.
  • 2. All tax liabilities and penalties, if any to be paid as additional on actual basis.
  • 3. Closer of company should be discontinue of business since last two year.

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