Close Private Limited Company

Winding up the business operations of a Private Limited Company is a tough job but sometimes becomes necessary. If proper procedure is not followed, the company would need to meet all the annual compliances of the Registrar of Companies.

In general, there are typically two ways to windup the operations of a Private Limited Company.

1.Power of Registrar to strike off the company name

According the section 248(1) of the Companies Act, when registrar find reasonable cause to ascertain that

• a company has failed to commence its business within one year of its incorporation or
• a company is not carrying on any business or operation for a period of two (2) immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455.

Then in both the case company and directors may file a application in Form STK-2  to the registrar for strike off the name of company from Ministry records If registrar statitisfy with the application than they allow the strike off of the company.

2.Voluntary Winding up – It’s a long but conventional method to close a company in India

As per Section 248(2) of the Companies Act, a company may choose to strike off its name after smothering all its liabilities, after passing a special resolution or after taking the approval of 75% of the members in terms of paid up share capital. The procedure is carried out by filing an application in form STK-2 to the Registrar for deleting the name of the Company.

In this case, the Registrar may forward a notice in form STK-1 to any company and all the directors of the company, which has failed to commence business within 1 year of its incorporation or which is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455. The Notice shall specify the intention of the Registrar to remove the name of the Company requesting them to send their representations alongwith copies of relevant documents within a period of 30 days from the date of the Notice.

A Company may choose to file an application with the Registrar of Companies in form STK-2, after extinguishing all its liabilities and passing of special resolution or obtaining consent of 75% of the members in terms of paid up share capital, specifying the grounds.

The application made using the form STK-2 must be accompanied by:

• indemnity bond on a stamp paper duly notarized by every director in Form STK 3 (It can given collectively or individually);
• a statement of accounts containing assets and liabilities of the company made up to a day, not more than thirty days before the date of application and certified by a Chartered Accountant;
• an affidavit on a stamp paper, duly notarized, in Form STK 4 by every director of the company to be given individually;
• a copy of the special resolution duly certified by each of the directors of the company or consent of seventy five per cent of the members of the company in terms of paid up share capital as on the date of application;
• Attested Copy of Pan Cardand identity proof of all the directors.
• a statement regarding pending litigations, if any, involving the company.
• if the person is a foreign national or non-resident Indian, the indemnity bond, Affidavit and declaration shall be notarised or appostilised or consularised. ix.a no objection certificate from appropriate Regulatory Authority concerned in respect of following companies, namely.

The form STK-2 must be signed by a director duly authorized by the board and certified by a Chartered Accountant in whole time practice or Company Secretary in whole time Practice or Cost Accountant in whole time practice, as the case may be. Along with them, a statutory ROC fees of INR 5000 need to be paid along with the form.

Being a reputed name in the field of company incorporation services, Trademark Bazaar offers result-oriented services to its clients in regard to the closure of Private Limited Company.