How to Close a Private Limited Company

How to Close a Private Limited Company ?

As per section 2(68) of companies act, 2013, private company means companies whose articles of association restrict the transferability of shares and prevent public from subscribing it.

Registration process for a private company is an easy procedure. On the contrary, to close private limited company is more complicated and time-consuming. Most difficult question for everyone is how to close a pvt ltd company.

There are two options available for non-functional private company-

1. Fast trick exit (FTE) mode – to permanently close private limited company and provides procedure for closing a private limited company.

2. Granting the ‘Dormant status’ – when company is not operational currently but registered for a future project. This is not exactly the procedure for closing a private limited company.

Fast Track Exit (FTE) mode

This option is easier and less time consuming as compared to regular winding up process for which official liquidator is to be appointed.And hence is an easy answer for how to close a pvt ltd company and provides simple procedure for closing a private limited company.

Procedure for closing a private limited company through FTE mode-

1. Application to close private limited company should be sent through form FTE, which is available on MCA website. The form should be signed digitally by authorised director and application fee of Rs.5000/- should be paid.

2. When the application is received by registrar, he would display the name of the company on its website for 30 days to give notice to everyone who might have objection on striking off the name of the company.

3. Registrar will issue a certificate to close private limited company. This will state that the name of the company has been struck off from the register of companies maintained by ROC.

4. Company will then publish a notice in a vernacular newspaper notifying everyone regarding closure of the company.

Following documents are to be attached with the form FTE-

1. Board resolution passed by board of directors of the company approving to close private limited company. Also, all the bank accounts, registrations with the government authorities should be closed or cancelled before applying for closure.

2. To close private limited company, an affidavit on a stamp paper should be produced by all the directors of the company. This would state that-

- Director’s swear that they are the directors of the company

- Company has closed all the bank accounts in its name

- The company has nil assets and liabilities

- Company is not carrying on any business for at least past 1 year

- Reasons for not carrying any business

- Company has no statutory dues and no litigations are pending before any court of law against or involving the company

- All the directors of the company should execute an indemnity bond on a stamp paper of Rs.200/- with 2 witnesses. This should undertake to do the following-

- Indemnify any person for any losses that may arise after closing private limited company

- All lawful claims arising in future will be paid and settled after the closure.

  • Settle all lawful claims and liabilities which are not in notice of the company yet.

Therefore, it is now clear how to close private limited company and procedure for closing a private limited company.

For more information you can visit www.registrationsindia.com

Let us know your Registration, Taxation & Compliance Requirements






    error:
    × Chat with Us