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How to Close a Private Limited Company

How to Close a Private Limited Company ?

Registration of private limited company is easy but its liquidation requires certain compliances under Companies Act, 2013. A private limited company is an artificial person that has a separate legal entity. A company can be liquidated either voluntarily or by Tribunal's order. "How to close a private limited company" it should be in existence for at least one year.

Before closing a company permission of all the creditors is required.

If everyone agrees to the closure of private limited company the directors can opt for a fast track scheme offered by Ministry of Corporate Affairs (MCA). The scheme offers a quick route to wind up a company which doesn't require much complications.

In this procedure the complications are less and they are less time-consuming. The Fast Track Exit Scheme is simple and doesn't need you to opt for the regular winding up process which requires appointment of an official liquidator. 

Preparation of documents

To liquidate a private limited company you need to first prepare certain documents. It should include Board resolution passed by the directors along with the minutes of the meeting in which it was passed.

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All the directors also need to sign affidavits and indemnity bond. A statement of affairs similar to that made by a liquidator is to be made by a practicing Chartered Accountant.

File e-Form FTE

After all the documents are compiled and duly signed by each director and member of the company, form-FTE for Fast Track Exit Scheme needs to be filed electronically. The form is to be signed by a director of the company using his digital signature certificate. The signed documents are then attached along with the form.

Further procedure to Close a Private Limited Company

The documents are to be submitted with the Registrar of Companies within whose jurisdiction your registered office is situated. It will take around 1 month for the authorities to approve the filing.

Once the application for closure of company is approved, the name of the company will be struck off from the Register of Companies. The company will then need to publish a notice in a vernacular newspaper notifying everyone about the closure.

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