How to shut down a Private Limited Company?

So, after all, the effort the Company didn't work-out as expected and now you want to close the Company, don't get too worked up - " If one door closes there will be thousands more to explore." However, the process of closure is time-taking and drains out a lot of energy, in spite of that it will be easier if you are well aware of the steps for closure. Before that, there are certain conditions before you close your Private Limited Company, they are;

• The Company should be at least One-year-old
• The creditors/shareholders of the Company agree to let the company closure.

Once the above conditions are met, then the Company can be closed by the FTE Mode (Fast Track Exit Mode). FTE Mode is a process which strikes off the defunct Company from the register.

You have few options for the Closure

• Either you shut down the company declaring it as defunct
• Or you sell it.
• You wind it up and dissolve the company.

The Documents Required for the Closure of the Private Limited Company

• Affidavits from the Directors
• Board Resolution
• Statement of Accounts
• Indemnity bond

Cost of the Service will calculate to about

• Professional Fees: Rs. 4,999/-
• Government Fees: Rs. 5,000/-

It rounds up to about Rs. 9,999/- only (this may vary with the professional fee and inclusive of the service tax)

To shut down the Private Limited Company by declaring it defunct, an application needs to be submitted to the Registrar of Companies (ROC). The process of the closure is as follows:

• Step 1: A resolution is made by the boardof company to document an application mentioning the Company is declared as defunct. This application is signed by two working directors of the Company.
• Step 2: Affidavit is signed by the directors which are notarized, and it verifies that the Company did some business till date and didn't have liabilities.
• Step 3: The Indemnity bond is signed by the directors and notarized by authorized professionals
• Step 4: A financial statement is to be filed by the Company, which has a record for the latest year prepared up to a period, which ended one month before the date of application. Along with this, a declaration of the financial position needs to be attached.
• Step 5: Audited Financial statement needs to be filed as well.
• Step 6: If the filed documents are appropriate, and the registrar is convinced then it will strike off the Company name from the register.
• Step 7: Thereafter the news of the same will be published in the Gazette leading to the closure of the Company.

The complete process approximately takes about 2 months and at times, the C.A might charge you to a max of about Rs.25,000, including the fees and miscellaneous charges.