Closure of a PVT LTD company
This query is : Resolved
01 April 2025
Respected experts, two of my friends Incorporated a PVT LTD company in 2024. Right from the incorporation ,no business was commenced and my friends (directors of such company) were underwent several difficulties between each other and left that company without any further ROC filings or actions. Now my query is, what are the required filings/further actions to be taken by them regarding the Closure of such Company. Are there any consequences to be faced by them?
Other point to be noted is : One of such friends incorporated another company with his mother and carrying the business. Is there any negative impact on his directorship in the newly incorporated PVT company without closing the first incorporated company(mentioned above) ?
Thanks in Advance
Other point to be noted is : One of such friends incorporated another company with his mother and carrying the business. Is there any negative impact on his directorship in the newly incorporated PVT company without closing the first incorporated company(mentioned above) ?
Thanks in Advance
02 April 2025
Here’s a structured overview of the necessary steps and potential consequences they may face:
Required Filings and Actions
Board Resolution:
The directors must pass a resolution to initiate the closure process. This can be done through a board meeting or by obtaining written consent from at least 75% of the shareholders.
Application for Strike-off:
They need to file an application for voluntary strike-off with the Registrar of Companies (ROC) using Form STK-2. This application should include:
A statement confirming that the company has not commenced any business.
A declaration of no outstanding debts or liabilities.
Consent from shareholders and creditors.
Documentation:
Necessary documents include:
Copies of the board resolution and shareholder consent.
A statement of accounts not exceeding 30 days from the filing date.
Indemnity bond (Form STK-3) and affidavit (Form STK-4) affirming no pending liabilities.
Publication of Notice:
Upon submission, the ROC will publish a notice in the Official Gazette, allowing 30 days for any objections from creditors or stakeholders.
Approval from ROC:
If there are no objections within the stipulated period, the ROC will approve the strike-off and issue a certificate confirming the closure of the company.
Surrender Registrations:
They should surrender any licenses and registrations associated with the company, such as GST registration, before applying for closure.
Consequences of Non-Compliance
Liabilities: If they do not properly close the company, they may remain liable for any debts or obligations incurred by the company, even if no business was conducted.
Legal Action: Failure to file necessary documents or settle liabilities could lead to legal action against them by creditors or regulatory authorities.
Future Business Impact: Non-compliance may affect their ability to incorporate new companies in the future due to unresolved issues with their previous company.
It is advisable for your friends to consult with a legal professional or a compliance expert to navigate this process effectively and ensure all obligations are met.
Required Filings and Actions
Board Resolution:
The directors must pass a resolution to initiate the closure process. This can be done through a board meeting or by obtaining written consent from at least 75% of the shareholders.
Application for Strike-off:
They need to file an application for voluntary strike-off with the Registrar of Companies (ROC) using Form STK-2. This application should include:
A statement confirming that the company has not commenced any business.
A declaration of no outstanding debts or liabilities.
Consent from shareholders and creditors.
Documentation:
Necessary documents include:
Copies of the board resolution and shareholder consent.
A statement of accounts not exceeding 30 days from the filing date.
Indemnity bond (Form STK-3) and affidavit (Form STK-4) affirming no pending liabilities.
Publication of Notice:
Upon submission, the ROC will publish a notice in the Official Gazette, allowing 30 days for any objections from creditors or stakeholders.
Approval from ROC:
If there are no objections within the stipulated period, the ROC will approve the strike-off and issue a certificate confirming the closure of the company.
Surrender Registrations:
They should surrender any licenses and registrations associated with the company, such as GST registration, before applying for closure.
Consequences of Non-Compliance
Liabilities: If they do not properly close the company, they may remain liable for any debts or obligations incurred by the company, even if no business was conducted.
Legal Action: Failure to file necessary documents or settle liabilities could lead to legal action against them by creditors or regulatory authorities.
Future Business Impact: Non-compliance may affect their ability to incorporate new companies in the future due to unresolved issues with their previous company.
It is advisable for your friends to consult with a legal professional or a compliance expert to navigate this process effectively and ensure all obligations are met.
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02 April 2025
The incorporation of a new company by one of your friends while there is an unresolved issue with the first company may have implications, but it generally does not prevent him from being a director in the newly formed PVT LTD company.
If your friend does not resolve the issues with the first company and fails to comply with necessary filings (like applying for closure), he may face scrutiny from regulatory authorities. This could affect his reputation and credibility as a director in the new company. Regulatory bodies may flag his directorship if they find discrepancies or non-compliance with the first company's obligations. This could lead to increased scrutiny on his new business operations.
If your friend does not resolve the issues with the first company and fails to comply with necessary filings (like applying for closure), he may face scrutiny from regulatory authorities. This could affect his reputation and credibility as a director in the new company. Regulatory bodies may flag his directorship if they find discrepancies or non-compliance with the first company's obligations. This could lead to increased scrutiny on his new business operations.
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02 April 2025
Thank You sir, will forsee the closure formalities those you mentioned.
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02 April 2025
Good luck.
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