Close a pvt. ltd. company

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gaurav

gaurav (Querist)
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04 February 2015 how to close a pvt. ltd. company and what is procedure for it.

c.bakshi

c.bakshi (Expert)
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19 February 2015 is is a running company i mean whether it is in operation or doing some business?

Asha Kanta Sharma online

Asha Kanta Sharma

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19 July 2024 Closing a private limited company in India involves a formal procedure with regulatory compliance to ensure all legal obligations are fulfilled. Here’s a step-by-step guide on how to close a private limited company:

### Step-by-Step Procedure to Close a Pvt. Ltd. Company:

#### 1. Board Resolution:

Hold a board meeting to pass a resolution recommending the voluntary winding up of the company. This resolution should be approved by a majority of directors and recorded in the minutes of the meeting.

#### 2. Extraordinary General Meeting (EGM):

Convene an Extraordinary General Meeting (EGM) of shareholders and pass a special resolution for winding up the company. The resolution must be approved by shareholders holding at least 75% of the voting rights.

#### 3. Filing with Registrar of Companies (RoC):

File necessary forms and documents with the Registrar of Companies (RoC):

- **Form MGT-14**: Filing of special resolution passed in EGM.
- **Form STK-2**: Application for striking off the name of the company.
- **Declaration of Solvency**: Form should be signed by majority of directors, stating that the company has no debts or can pay its debts within a reasonable period.

#### 4. Clearance of Liabilities:

Ensure all liabilities of the company are cleared or adequately provided for. This includes:
- Payment of creditors and liabilities.
- Disposal of assets, if any, to clear debts.

#### 5. Tax Clearance:

- Obtain Tax Clearance Certificate from income tax authorities.
- Clear any outstanding tax dues.

#### 6. Dissolution Advertisement:

- Publish a notice in a newspaper notifying the public of the intention to dissolve the company.
- Provide a copy of the notice to the RoC.

#### 7. Final Audit:

- Conduct a final audit of the company’s financial statements up to the date of winding up.
- Prepare final accounts.

#### 8. Application to RoC:

- File the application for striking off the name of the company (Form STK-2) along with required documents including:
- Special resolution copy.
- Board resolution copy.
- Affidavit from directors.
- Indemnity bond.

#### 9. Approval from RoC:

- The RoC will scrutinize the application and documents submitted.
- If satisfied, the RoC will strike off the name of the company from the register and issue a notice in the Official Gazette.

#### 10. Finalization:

- Once the company is struck off, it ceases to exist as a legal entity.
- The bank accounts of the company should be closed.
- Dispose of any remaining assets and distribute proceeds among shareholders.

### Points to Consider:
- **Compliance**: Ensure all statutory compliances are met throughout the process.
- **Legal Advice**: Seek legal advice to understand specific requirements and implications of company closure.
- **Employee Dues**: Clear dues of employees including salary, benefits, and provident fund contributions.

### Professional Assistance:
It’s advisable to engage a qualified Company Secretary or a Chartered Accountant to manage the procedural complexities and ensure compliance with all legal requirements during the closure process of a private limited company. They can provide guidance tailored to your specific situation and ensure smooth closure without legal repercussions.

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