Closure Of PVT LTD Company

Running a business comes with its own challenges. Sometimes when things do not work out a business may have to be shut down. There can be several reasons to close or wind up the company. Here are four ways in which a private limited company can be closed.

With the approval of 3/4 shareholders, A company which is not carrying any business for the past two financial years and the company has not obtained the company status as Closure.

GET FREE CONSULTATION

    STK-2 Form: 

    The is empowered to close a company that has not started its operations or if started, has become defunct and has been inactive for over two years. The application of such companies are filed in the prescribed form STK-2, the government fee payable on the STK-2 Form is Rs. 10,000/

    Various Methods to Close a Private Limited Company

    Striking off the Company by ROC by declaring it as Defunct:

     When a Company is inactive for over two years or could not commence its business operations within one year of its incorporation, the easiest method is to make an application for striking off the name of the company by filing an application in Form STK-2 U/s 248 of the Companies Act.

    Voluntary Winding Up of Company:

     With the approval of 3/4 shareholders, the company can make an application to NCLT for its voluntary winding up. Under this process, an Insolvency Professional is engaged in dissolving the company’s assets and paying the lawful claims. On the recommendations of the IRP, the NCLT passes the order for the winding up.

    Compulsory Winding Up of Company By NCLT:

     On an application by the creditors, ROC or the Central Government, the NCLT may start the compulsory winding-up of the company. An Insolvency Professional is appointed to dispose of the assets and pay the liabilities of the company. After the dissolution by RP is complete, the NCLT makes an order of winding up.

    Winding Off

    • The winding-up process is carried before the NCLT winding.
    • The insolvency professional sells all the assets and settles the liabilities. After winding up, the company comes to an end and cannot be revived in due course of time.
    • The winding-up is final and brings a definite end to the company. No one remains liable for the outstanding liabilities that could not be paid during the liquidation process.

    Striking Off

    • The striking off process is carried before the ROC and is based on the directors’ declarations.
    • No insolvency professional is involved during the striking off process.
    • The effect of the company striking off is that there is no compliance requirement, and for all practical purposes, the company has been closed.
    • However, if there are any government dues, tax dues, or any liability that comes up after the striking-off, the company’s directors remain personally responsible. Before filing for striking off, we advise you to settle all disputes, accounts and pay all dues.

    STK-2 Application for Company Striking off

    STEP 1

    To file the form stk-2 for company closure, a shareholders meeting must be called to decide about the closure At least 75% of voting rights are required to close a company

    STEP 2
    The current account of the company must be closed, and a certificate from the banker is needed to Prepare a financial statement with Nil Assets and Liabilities.
     
    STEP 3

    All shareholders and directors have to sign an affidavit and documents filed are correct and true in an indemnity bond that the directors shall pay if any liability comes up.

    STEP 4

    Form STK-2 an application for removal of name of the company shall be submitted to the Registrar of Companies shall be signed by the director and need to be certified by a professional by paying the govt fees for approval purposes and SRN shall be generated. 

    STEP 5

    After filing an application by the company for company strike off, the ROC shall publish a public notice to strike off from the general public and regulatory authorities. In the span of time period If there are no objections received from the general public or government authorities, The Register of Companies will proceed to remove the name of the company.

    Frequently Asked Questions​

    Strike Off of a Company is a formal procedure of company closure by removing the name from the Register of Companies (ROC). The company cannot perform any business activity after the company status changed to Struck off. Strike off can be initiated either voluntarily by the Company or Registrar of Companies on grounds of default or non-compliance.

    E-form STK-2 is used by companies for making an application to the Registrar of Companies for strike off or removal of its name.

    For the Company closure it takes around 10-15 days for making an e-form application for company Strike off. After that, it will take 12 to 18 months for the processing and completion of the process by ROC.

    Yes, the Digital Signature of a director is mandatory for form Stk-2.

    Yes, the Company current account is required to be closed before filing of Form STK-2.

    Yes, before Company Closure a company has to file Form INC 20A

    GET A FREE CONSULTATION

    Mobile : +91 - 81221 83745
    Email : support@kanakkiyal.com