Closure of Company
Closure of Company or Company Wind up process require surrender of various other Statutory registration such as PAN, TAN, GST, PF or any other statutory registration taken by the Company.
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A company incorporated under Companies Act and registered by the Registrar of Companies need to adhere the compliance as per the provisions contained in Companies Act 2013 and relevant rules made there-under.
There are many circumstances which lead to the decision of Closure of companies, these circumstances depend upon the facts and situation of the company, however some most common circumstances which leads to closure of company are:
- The company unable to commence business after incorporation, there might be situation that the company is incorporated for a business but after incorporation the business might not got started, then eventually it leads to closure of company after some significant time period say one year.
- The objective for which the company is incorporated is fulfilled and there is nothing left to operate the company. There are certain companies which got incorporated for the purpose of specific task or objective, after fulfillment of such task or objective the company need to be closed.
- The business of the company no longer exist and it incur losses, there might be circumstances wherein the company was successfully operating but after some years its business doesn’t exist and the company incur losses, thus such companies may got closed.
- The promoters / directors of the company dies and remaining promoter / director doesn’t want to continue the company.
- The company become insolvent and unable to pay to its debt, in such cases there are circumstances for compulsory winding up of companies by the tribunal.
- Non compliance lead to monetary penalty in terms of late filing fees and also leads to certain severe consequences such as Inactive status of company, disqualification of directors, strike off of companies by the registrar etc. Such situation may leads to closure of companies.
- The company has operated in the manner which is against the interest of sovereignty and integrity of India, security of state, friendly relation with foreign state etc.
- The company activity was conducted in fraudulent manner and the statement of affairs has been guilty of fraud, misfeasance or any misconduct then such circumstances leads to closure of company.
Procedure of Closure of company can be in the form of:
- Voluntary winding up: In this case the company passes a special resolution for winding up of company
- Winding up of company by order of Court: In this case any competent court or tribunal has ordered for winding up of company due to reasons recorded in writing and mentioned in the order of winding up of company.
In the case of voluntary winding up of company the promoter / management / directors of the company has two options, one is to wind up the company by filing Fast Track Exit Form, this is also known as FTE Form, in this case the company need to furnish audited financial statement, latest income tax return copy along with declaration that there are no creditors or debtors in the company and the asset and liabilities of the company is nil. All the forms for Closure of Company registration is require to be filed on MCA Portal.
In case of voluntary winding up of company another option available for the promoters / management / directors is to obtain the “Dormant” status. The main benefit of obtaining dormant status is the company got relief from filing of annual return and adherence of various record keeping compliance. In this scenario the company name is reserved and at later stage of promoter/ management wish to survive the company then the company can be active again after fulfilling necessary e-forms and application before registrar of companies.
With the ever changing Law and regulatory requirements, we keep on track and advise the same on timely manner in order to ensure proper compliance. We at ReturnFilings.Com will understand the purpose of your closure of company and thereafter will provide you detailed analysis mentioning the law requirement and compliance need to fulfill in order to provide company closure related services economically and efficiently. We at ReturnFilings.Com will provide you details of regulatory filings in order to ensure proper smooth and timely compliances. We at ReturnFilings.Com are determinate to provide end to end solution; our motto is you concentrate on your business while we at ReturnFilings.Com will take care of all your compliance need for closure of Company.