Overview of the Closure of the Private Limited Company

In very simple terms, Closure of the Private Limited Company means shutting down all the business and the related activities due to specific reasons. The closure of a Private Limited Company can happen in two different ways.

Voluntary Wind up

It is done due to insufficient funds inability to clear the debts. By disregarding the regulations of the Memorandum of Association, a company can close down. Voluntary wind up also occurs through special resolution or resolution taken in the General Body meeting.

Compulsory Wind up

Compulsory wind-up takes place if the court or tribunal orders it by means of passing a special resolution by the directors of the company, suggesting the intervention of the court during the Board Meeting of the company.

Whether voluntary wind-up or compulsory wind-up, our team of professionals at Taxrepair, will guide you at every stage of the procedures and proceedings to make the process as smooth as possible.

Documents Required for the Closure of the Private Limited Company.

• Copy of PAN Card of the company
• Proof of closure of the company’s bank account
• Notarised Indemnity Bond from all the Directors
• Statement of Company’s Account (Latest)
• Statement of the company’s accounts audited by a Chartered Accountant related to all the assets and liabilities of the company.
• Proof of approval of the resolution by 75% of the board members
• Application to remove the name of the company
• Affidavit in Form STK 4 by the Company
• Letter of Consent from all the Directors about their thoughts on closing down the company has to be submitted.

Benefits of Closure of the Private Limited Company

Advantages to the Company’s Creditors

The creditors of the company will be paid from the process of liquidation as they are eligible for the default payment. The payment will be made in keeping with the proportion of credit given by the creditors to the company.

Not Liable of Any Debts Post Liquidation

The Liquidation process of the company will make the directors and the official of the company liable for any debts. Thereby, they are relieved from all the liabilities, creditors and related stress.

Withdrawal of Legal Action of the Company

If the directors pass the resolution of closure of the company voluntarily, then the court or the tribunal won’t be taking any legal action taken against the company. It will provide an excellent platform for the company director to focus more on alternate business opportunities.

Lower Cost of Liquidation

The expenses or costs incurred during the liquidation or the closure of the private limited company is comparatively low; this is because the charges will be based on the sale of assets during the liquidation process.

Cancellation of the Lease Agreement

Once the company has decided to close down its business, during the liquidation process, it will automatically cancel out all the lease agreements the company has entered into with any parties. In case the company has to pay any penalty due to the cancellation of the agreement/s,
the same will be taken care of from the sale of assets.

Timelines for the Closure of the Private Limited Company

Closing down/Winding up of a Private Limited Company can be an arduous task, and it helps to take the assistance of experts in these kinds of proceedings to take over the task for you. Our team at Taxrepair have expertise in the procedures involving the closing down of the private
limited company. We ensure that the entire process and proceedings are done seamlessly and smoothly at our end; the time taken for the complete closedown of the private limited company is subject to the approvals and reverts of the concerned officials.

Contact us for getting more information and guidance regarding the closure of the private limited company from our team of qualified experts.