How to close a limited company: Procedure for winding up a limited company

1. How to close a limited company: Procedure for winding up a limited company

2. A Limited Liability Partnership can be closed down by declaring the LLP as defunct. Declaring the LLP as Defunct: In case the LLP wants to close down its business or where it is not carrying on any business operations for the period of one year or more, it can make an application to the Registrar for declaring the LLP as defunct and removing the name of the LLP from its register of LLP’s. closing a limited company Procedure: File E-Form 24 with the RoC along with the following documents: Copy of detailed application. There is a prescribed format of detailed application in MCA which needs to be submitted. Copy of authority to make the application. Copy of consent of all the partners. Copy of consent of all the creditors. Copy of affidavit for each of the designated partners. Copy of the undertaking/ indemnity bond for striking off name. Statement of assets and liabilities duly certified as true and correct by auditor/chartered accountant in practice. Copy of acknowledgement of latest Income tax return. Attested (by CA) copies of PAN and address proof of all designated partners/partners. A paragraph of reason for which the LLP is proposed to be shut down. Once all the documents are executed, the same are filed with the Registrar in e-form 24. The Registrar will keep the application open for a period of one month to check if there are any objections and once it is satisfied, an order will be issued to strike off the name of the LLP from its records and complete the process. Although this process does take some time, it is one of the most convenient ways to close a LLP, which has not undertaken any business during the last one year. Under Companies Act 2013, a Company can be closed in two ways. Winding Up a limited company Winding up is a tedious process and can be done either voluntary by calling up a meeting of all stakeholders and passing a special resolution or can be done on the order of Court or Tribunal. Strike Off mode was introduced by the MCA to give the opportunity to the defunct companies to get their names struck off from the Register of Companies. On 27th December 2016, MCA has notified new rules i.e. Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 prescribing rule for winding up or closure of the private limited company under companies act 2013. By releasing the form STK 2, the ministry of Corporate Affairs has brought the Section 248- 252 of 2013

3. act into force. liquidation of company Fast track Exit This is the most awaited procedure that got active again on 5th April 2017. This procedure was introduced in Section 248 of Companies Act 2013. Fast Track exit can be done in two ways: Suo Moto by Registrar The registrar may strike off the name of Company on its own if: Company has failed to commence any business in a year of its incorporation The company is not carrying out any business or Activity for preceding 2 financial years . The Registrar sends a notice (STK-1) of his intention to remove the name and seeks the representation of Company in 30 days. Voluntary Removal of Name using Form STK 2 Once the form is filed, the Registrar has power and duty to satisfy him that all amount due by the company for the discharge of its liabilities and obligations has been realized. ROC can also issue a show cause notice in case of default in filing returns or other obligations. After above formalities, ROC issues a public notice and strike off the name of Company after its expiry. Companies that cannot file for voluntary strike-off: A company cannot fill the form STK 2 at any time in the previous 3 months if the company has: Has changed its name or shifted its registered office from one State to another; Has made a disposal for value of property or rights held by it, immediately Has engaged in any other activity except the one which is necessary or expedient for the purpose of making an application under that section, or deciding whether to do so or concluding the affairs of the company or complying with any statutory requirement; Has made an application to the Tribunal for the sanctioning of a compromise. closing a ltd company liquidation of company

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