Close a Private Limited Company

Close a Private Limited Company

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Closure of a Private limited company

If the company owners or directors decide to discontinue or wind up the business, they may consider for the options of the closure. Most feasible or easiest way to close a company is striking off its name from Register of Companies. This is preferable when a company is inoperative for a certain period. Other options include a winding-up petition, however that involves more time, investment and compliance.

On approval of the strike off, the company’s name is removed from the register and thus, it is not existent in the eyes of laws. The company must fulfill all the compliance before proceeding for the strike-off application. The application is accompanied by various documents and requires assistance from the professional.

Ways of winding up of a company in India

Documents required for strike-off of company

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Process to dissolve a private limited company

Explore winding up of a company in India

Frequently Asked Questions

It can be filed only when the company repays or extinguishes all its liabilities and receive a No Objection Certificate (NOC) from the creditors before filing the closure application. And conduct a meeting where all the directors decide upon the closure by signing a special resolution or a consent of seventy-five percent members regarding paid up share capital.

The Registrar of Companies can remove the company name from the list of companies if, he has reasonable cause to believe that:
● A Company failed to commence its business within one year of its incorporation; or
● A company is not carrying on any business or operation for two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company.

The closure is the best option in case the company is not running as it:
Saves the yearly compliance cost
No non-compliance risk.
No risk of high penalties and prosecutions
No risk of getting into default

After filing the application with the Ministry of Corporate Affairs, it takes about 90 days for striking off the Company from MCA records. On approval for strike-off by RoC, the notice of strike-off is published on its website to open for any objection or representations by third parties.

RoC will publish a list of companies struck off in the Official Gazette. The Company under fast-track exit mode will be considered closed from the date of publication of the notice in Official Gazette.

The closing documents have to be filed within 30 days from the date of signing of the assets and liabilities statement.

It is necessary to intimate the Registrar for the closure of Private Limited Company to update the MCA data and make company free from all its legal compliances.

Fast Track Exit is a scheme introduced by the Ministry of Corporate Affairs (MCA) for inactive companies to wind up and get their names struck off from the MCA record with lesser formalities.

In case the company is struck off due to its default, then it would have to apply to the National Company Law Tribunal for changing the status of the company from strike off to active by giving valid reasons for the fault.

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