Closure of Pvt Ltd Company

For some reason, you may have opened up a private limited company but not all companies are successful. Instead of keeping your company inactive, it is better to voluntarily carry out the closure of the company and stay-free from the burden of compliances. This article can provide you with a holistic approach to closing down an unsuccessful private limited company

Avoid compliances
If the company is no more functional it is better to opt for closure of the company to prevent any unnecessary MCA compliances and procedures which can absolve the directors of the company from being responsible later on.

Avoiding penalties and fines
If the company is dormant or defunct, the closure of the company will save unnecessary fines and penalties for noncompliance.

Convenient to close
Unlike before the private limited company has been convenient to close like never before. You can use two options to close- Fast Trick Exit Mode and by granting the “Dormant” status.

Here is a checklist of the procedures you need to carry out for closure of the company

1. Fill up the FTE or Fast Trick Exit application form available on the MCA website
2. After 30 days the Registrar will issue a certificate for the closure of the company.

1. At first, a board resolution must be passed by the BOD for approving the closure of the company.
2. Cancel all the Bank accounts and statutory registrations with the government in the name of the company.
3. The directors must sign an affidavit stating that the company has closed all its accounts,
   • Has nil assets and liabilities and no business activity has been carried out for the past one year at least.
   • Also, no statutory dues must be pending and the reasons for the closure have to be disclosed in the affidavit.
4. An indemnity bond is required to be executed for indemnifying any person for any loss that may arise due to the closure of the company.
   • It will also indemnify to settle any lawful claims that may arise according to the closure.
5. Head over to the MCA website and fill up the FTE form and get it digitally signed by the authorized director.
   • The application for closure will cost INR 5000.
6. After receiving the application, the Registrar will display the name of the company on the website for 30 days.
   • It will notify anyone who objects to the closure of the company.
7. If there is no objection,
   • The Registrar will proceed to issue a certificate of closure signifying that the name of the company from the list of companies in the register maintained by ROC has been struck off.

1. Board of directors’ approval for closing down the company
2. Affidavit of a declaration by the directors with details prescribed in form STK 4
3. Indemnity bond indemnifying the loss of personnel due to closure in form STK 3
4. FTE application