Closing a Private Limited Company in India or specially to our functional area i.e. Varanasi requires compliance with the Ministry of Corporate Affairs (MCA) regulations. Whether your Company is non-operational or you wish to dissolve it voluntarily, following the legal procedure is crucial. This guide explains the process, required documents, and key considerations for company closure.
Why Close a Private Limited Company?
Non-operational or inactive business
Financial constraints or losses
Avoidance of annual compliance penalties
Change in business objectives
Methods to Close a Private Limited Company
Step 1: Confirm Eligibility for Striking Off
Ensure the company qualifies to apply for striking off under Section 248 of the Companies Act, 2013. Some key conditions are:
- The company has not commenced business within a year of incorporation, or has not been in operation for the preceding two financial years.
- There are no ongoing business operations, liabilities, or dues.
Exclusions:
- The company should not have been delisted due to fraudulent activities.
- It should not be under investigation or involved in any legal disputes.
Step 2: Settle Outstanding Liabilities
Before applying for striking off, ensure:
- All liabilities, including statutory dues, creditors' payments, and taxes, are cleared.
- GST and income tax returns are filed up to date.
Step 3: Conduct a Board Meeting
- Convene a Board Meeting with the directors to pass a resolution for striking off the company's name.
- The resolution should authorize a director to handle the striking-off process.
- Approve the draft affidavit, indemnity bond, and statement of accounts.
Step 4: Obtain Shareholders’ Approval
- Convene a General Meeting of shareholders to pass a Special Resolution (if required by the Articles of Association).
- Obtain approval from at least 75% of the shareholders in terms of paid-up capital.
Step 5: Prepare Documents
Prepare and compile the following documents:
- Indemnity Bond (in Form STK-3) signed by directors.
- Affidavit (in Form STK-4) from directors stating compliance with all rules and regulations.
- Statement of Accounts (certified by a Chartered Accountant) not older than 30 days.
- Copy of Board and Shareholders’ Resolutions.
- PAN Card and Aadhaar copies of directors.
Step 6: File Application with ROC
- File Form STK-2 with the Registrar of Companies (ROC) along with the prescribed fee.
- Attach the prepared documents:
- Indemnity Bond
- Affidavit
- Statement of Accounts from Chartered Accountant
- Board Resolution
- Shareholders' Resolution (if applicable)
- Indemnity Bond
- Affidavit
- Statement of Accounts from Chartered Accountant
- Board Resolution
- Shareholders' Resolution (if applicable)
Step 7: ROC Examination
- The ROC reviews the application and verifies compliance.
- If satisfied, the ROC issues a notice (STK-6) to be published in:
- The Official Gazette.
- A newspaper (in English and vernacular language).
- The Official Gazette.
- A newspaper (in English and vernacular language).
Step 8: Public Objections (30 Days)
- The public has 30 days to raise objections or claims against the striking-off application.
Step 9: Final Order by ROC
- If no objections are raised, the ROC strikes off the company and notifies it in the Official Gazette.
- A certificate of dissolution is issued.
Our firm based in Varanasi can simplify the company closure process by:
Ensuring proper documentation
Filing applications on time
Managing legal compliance
Liaising with MCA for approvals
Conclusion
Closing a private limited company in India or specially in our functional area i.e. Varanasi involves legal formalities that require meticulous attention. Hiring a professional consultancy firm can streamline the process and prevent delays.
Looking to close your private limited company in Varanasi? Contact us today for hassle-free company closure!
AKSHAY K JAIN AND COMPANY
CA Akshay Jain – Chartered Accountant
📍 B 38/267 F1-2, Parmeshwar Nagar, Birdopur, Mahmoorganj, Varanasi
📞 +91 9956948337 | +91 7379998666