Strike off Pvt Ltd Company Archives

How to Close a Privated Limited Company in India? Introduction Directors or creditors may decide to close their company for various reasons. If you are wondering how to close a Pvt Ltd company, there is a specific process that all companies must follow. When a company is incorporated, the ROC issues a certificate of incorporation. If the company wishes to remove its name from the official records, it must go through a legal procedure. Below, we have outlined all the details regarding the company closure process. Closure of a Private Limited Company Closing a Private Limited Company (Pvt Ltd) refers to the process of legally dissolving the company, ensuring that it ceases to exist as a legal entity. This involves settling liabilities, complying with regulatory requirements, and striking the company’s name from the official records. Reasons of closing a Pvt ltd company To close a company is a major decision for itself. If it is registered in ROC, then there must be valid reasons for closing it. Here are a few reasons why a person might want to close a private limited company; Business Not Started : The company does not get a Certificate of Commencement of Business within 180 days of incorporation. No Business Activity : The company has not operated for two continuous years and has not applied for dormant status. Failure to File Documents : The company does not submit financial statements or annual returns for two years. Owners Decide to Close : The directors and shareholders may choose to shut down the company voluntarily. Unable to Pay Debts : The company is facing financial trouble or bankruptcy, leading to closure under legal rules. Government Closure (ROC Strike-Off) : The Registrar of Companies (ROC) may close the company if it remains inactive. Court Orders : Legal issues, fraud, or other violations may lead to closure by the National Company Law Tribunal (NCLT). Company Merged or Sold : If the company merges with another or is acquired, it may close. Key steps to close a Pvt ltd company Hold a Board Meeting : Pass a resolution for closure. Settle Financial Liabilities : Pay off debts and taxes. File Necessary Forms : Submit STK-2, MGT-14, or other applicable forms. Publish Public Notice : Inform creditors and stakeholders. Receive ROC Approval : The company is officially struck off. What are the different ways to close a Pvt ltd company There are five ways to close a company, depending on the reason for closing. Most companies close through Strike Off, Voluntary Liquidation, or Compulsory Liquidation. Below, we explain how to close a Pvt Ltd company in detail. 1. Voluntary Strike Off Under Section 248(2) of the Companies Act, 2013 If the company does not have any liabilities and not performing well business operations for at least two years, then they can apply for company closure under this 248(2) of the companies act. For applying in this section, you can follow the below steps: Hold a board meeting for the approval of closing a company. If a company has any liabilities, such as loans, taxes, then the company must clear it. Obtain a NOC (Non-Obligation Certificate) from creditors Call an Extraordinary General Meeting and pass the approval from 75% of shareholders. Company needs to submit STK -2 form with necessary documents in the ROC. ROC will review the application and publish STK -6 (public notice) for any objections. If there is no objection raised by ROC within 30-60 days, then the company is removed from the register of the Ministry of Corporate registrar. We provide expert services for Strike Off Pvt Ltd Company and Pvt ltd annual filing, simplifying the company closure process while ensuring compliance with all legal requirements. 2. Compulsory Closure by the Registrar of Companies (ROC) If a company fails to obtain a Certificate of Commencement of Business within 180 days, does not file financial statements for two consecutive years, and has no business operations during this period, the Registrar of Companies (ROC) may initiate its closure under Section 248(1) of the Companies Act, 2013 after issuing a notice. In such case; The Registrar Of Companies sends a notice to the company and its directors. If the company does not respond to the notice in the specified time limit, then ROC issues a public notice. The company name will be removed from ROC after 30-60 days. 3. Winding Up by the Tribunal (NCLT) When the company is unable to pay the debt, this method is getting used. It can apply in two types: If directors and shareholders decide to close the company or creditors file for liquidation. Voluntary wind up when directors and shareholders mutually decide to close the company, then use this method. For that, the company needs to follow the below steps; Hold a board meeting and approve a resolution for voluntary liquidation. Company needs to hire a professional liquidation to handle the asset distribution. Needs to submit a petition to NCLT (National Company Law Tribunal). Company needs to clear the liabilities. When company submits the final report, NCLT issues a dissolution order. Wind up by creditors When the company is unable to fulfill the debts, creditors file petition to NCLT for the company closure. In this case, Creditors apply to NCLT. NCLT appoints liquidator to settle liabilities. Once the liabilities are settled, NCLT approves the dissolution order and company is officially dissolved. 4. Fast Track Exit (FTE) Scheme (For Dormant Companies) Companies who have been active for at least one year or not commenced business since incorporation can apply under this scheme. When a registered company does not generate profit via business operation and has legal existence, It calls Dormant companies. For these type of companies, RCO processes quickly under Fast Track Exit scheme, the process for closing the company is same but it provides decision quickly than usual. The required documents for closing the company Digital signature of directors Signed consent letter and affidavit by directors. Indemnity Bond signed by all the directors. Copies of consent by at least 75% shareholders. Statement of Accounts. Bank closure statement and bank closure letter. Conclusion How to close a Pvt Ltd company depends on its situation. Whether it's a voluntary strike-off, compulsory closure, or winding up through NCLT, each method has specific requirements. The company should assess its condition before deciding. For proper guidance, it's best to consult a professional or expert. Suggested Read : Voluntary vs Involuntary Strike Off Tax Structures for Pvt ltd Company LLP Vs Private limited company Monthly Compliance for Pvt Ltd Companies Advantages & disadvantages of Pvt ltd Company FAQ Yes, It is important for a company to file financial statements and annual returns. ROC will remove the company name from the registrar of companies. Once the ROC receives an application, a notice is published, and if the ROC does not publish any objection within 60 days, company closure is confirmed. If the company fails to file annual returns for consecutive two years, the company is not able to pay the debts, and the company is inactive for at least one year; in such cases, the company decides to apply for closure. If the company fails to file an annual return for more than two years, then ROC can strike off the company for not meeting the legal requirements.

Strike off Pvt Ltd Company

How to Close Pvt Ltd company in India?