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May 08, 2017 Registrationwala

How to Close a Private Limited Company?

Private Limited Company

How to Close a Private Limited Company?

Initiation of any Business needs Company Registration. Organization should be enlisted to have business foundation. Closing down an organization is a testing procedure. In any case, on the off chance that you are the proprietor of a fused business as a Private Limited Company then it is significantly more so can be closed down in a few conduct contingent on the necessities of the entrepreneur.

  • Sell the company
  • Declare the organization " defunct " and close it down
  • 'Wind up' and disintegrate the Company

Defunct Company mainly deals with the closure of companies under the Companies Act 2013 have not yet been notified. According to Section 560, of the Companies Act, 1956, deals with a strike off provisions of a defunct company.

Company can be defuncted or strike off its name from the  of Registrar of Company can apply by means of for strike off of its name from the enlist kept up by ROC. A private restricted organization might be proclaimed outdated and closed around appealing to the Registrar of Companies.

This may be done in the following manner –

  • Board Meeting – Two Directors of the company must sign a resolution that resolves to apply to the ROC for the declaration of the company as defunct.
  • Affidavit –Notarized affidavit must be submitted by 2 director which has also been signed and verified that the company did business for a period up to date, and has since then discontinued its operations, and has no assets or liabilities.
  • Indemnity Bond – A notarized indemnity bond, duly signed by two Directors, which states that in the case of any liabilities on the company, such liabilities will be met fully by the applicants, even after the name of the company is struck off the register of companies must be submitted.
  • Accounting Information – The financial statement of the Company for the most recent year, prepared up to a period which ended one month before the date of application, must be filed by the Company. The statement of accounts submitted must provide a true and fair view of the company’s financial position, and to verify the same, a declaration stating this shall be submitted by a practicing Chartered Accountant.
  • Financial Statement – At least one year from the date of incorporation must have passed before the company petitions the ROC for declaring it as defunct. Audited financial statements for the period in which business has been undertaken must be submitted along with the application. In case any unsecured loans are there, then a waiver letter for the same must be submitted.

Winding up the Company

 (a) By the Tribunal (also known as compulsory winding up); or

(b) Voluntary winding up company

Voluntary winding up may be

  1. Member’s Voluntary winding up.
  2. Creditor’s Voluntary winding up.

Whereas Compulsory winding up may be, in addition to the a fore mentioned –

  1. Any contributor or contributors
  2. By the central or state govt.
  3. By the registrar of any person authorized by central govt. for that purpose.

In the case of voluntary winding up, the process is undertaken without court supervision.

Procedure for Voluntary Winding Up –

  • Board Meeting with 2 Directors is conducted and a resolution consisting of a declaration given by directors that they are of the opinion that the company is under no debt or that it will be able to pay off its debt from the proceeds from the sale of its assets is passed.
  • General Meeting is conducted after issuing due notice for proposing the resolution along with the explanatory statement. In the case of ordinary majority an Ordinary resolution, or a special resolution in case of the 3/4th majority, for the purpose of winding up is passed in the General Meeting. The winding up will start from the date of passing of the resolution.
  • Creditors Meeting is conducted after passing the resolution and if majority creditors are of the opinion that winding up of the company is beneficial for all parties then the company can be wound up voluntarily.
  • Liquidators Account is prepared after winding up of affairs of the company, and the same is audited as well.

Winding up the Company

(a) By the Tribunal; or

(b) Voluntary Winding up

Deliberate Winding up might be

  1. Member's Voluntary Winding up.
  2. Creditor's Voluntary Winding up.

Though Compulsory twisting up might be, not with standing the previously mentioned –

  1. Any donor or givers
  2. By the focal or state govt.
  3. By the enlistment center of any individual approved by focal govt. for that reason.

On account of deliberate twisting up, the procedure is embraced without court supervision.

Strategy for Voluntary Winding Up –

  • Board Meeting with 2 Directors is led and a determination comprising of a presentation given by executives that they are of the supposition that the organization is under no obligation or that it will have the capacity to pay off its obligation from the returns from the offer of its advantages is passed.
  • General Meeting is directed subsequent to issuing due notice for proposing the determination alongside the informative explanation. On account of conventional greater part an Ordinary determination, or an uncommon determination if there should arise an occurrence of the 3/fourth lion's share, with the end goal of twisting up is passed in the General Meeting. The twisting up will begin from the date of going of the determination.
  • Creditors Meeting is led in the wake of passing the determination and if larger part leasers are of the feeling that ending up of the organization is valuable for all gatherings then the organization can be twisted up willfully.
  • Liquidators Account is set up in the wake of ending up of issues of the organization, and the same is reviewed also.

If you have any intension to close your company Registrationwala has all the solution.

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