MCA : Ease of closing a Business in India
Company Closing via Strike Off Mode:
The company can choose the Strike Off Mode. This option is applicable for defunct companies that fail to commence operations within one year of incorporation. Cease business for two years before filing. Have unpaid subscription amounts with no declaration within 180 days. In this process, Copany files an application with necessary documents, like No objection certificates, indemnity bonds from directors., and a certified statement of accounts (not older than 30 days). this is simpler and cost-effective but requires up-to-date compliance for two years.
Pre-requisites to the application for Strike Off
- No Debt/Laon in the Company
- No dues to any statutory authority
- No liabilities in the company.
- No investigation or prosecution is pending in any court.
- No Public Deposits:
- Filing of pending forms: All overdue returns, such as Form No. AOC-4 or AOC-4 XBRL, as the case may be, and Form No. MGT-7, up to the end of the financial year in which the company ceased to carry its business operations, shall be filed before making an application
For closure of your the company, we have to compliance the filling formalities of ROC filling and complete the company closing formalities after ROC filling & complete the closing process of the company:
As per Section 248(1)(c): If any company is not carrying on any business or operation for a period of 2 immediately preceding Financial Years, then it may go for a voluntary strike-off by filing Form STK-2 with RoC fees of Rs. 10,000/- with the following documents:
- Board Resolution
- Consent of Shareholders
- Affidavits from the Directors
- Indemnity from the Directors
- Self-attested PAN Card of Directors
- Self-attested Address Proof of Directors
- Proof for closure of Bank Account
- Statement of Account certified by Directors and CA not later than 30 days
Please note before applying for the closure of the company, any charge or security interest must not be existed against the company as of the date, and the bank account of the company must be closed.
What is covered in the package?
- Drafting of resolution and letter for Bank Closure
- Preparation of Statement of Assets and Liability
- Drafting of Partners Closure Resolution
- Drafting of Affidavit & Indemnity Bond
- Application Filing with ROC & Followup
Company Closing via NCLT Liquidation made:
Voluntary Liquidation (Section 59, IBC, 2016)
Dissolution of a Company Post-Liquidation : A streamlined process under the Insolvency and Bankruptcy Code (IBC) for solvent companies.
- Complete Liquidation of Assets: The liquidator ensures all assets of the company are identified, valued, and liquidated. Proceeds are distributed to creditors, shareholders, or stakeholders in accordance with the hierarchy specified in the Insolvency and Bankruptcy Code, 2016 (IBC). In this process Company Declaration of solvency by directors (no liabilities, no intent to defraud)., Special resolution appointing a liquidator. Notify Registrar and Insolvency and Bankruptcy Board of India (IBBI). Liquidation within 90-270 days (depending on creditor involvement). Submit a final report to the NCLT for dissolution.
- Once the liquidation process is complete, the liquidator files an application for dissolution with the National Company Law Tribunal (NCLT). The application includes:
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- Details of the liquidation process.
- Confirmation that all claims and dues have been settled.
- A final report as per the IBC (Regulation 45(3) of the Liquidation Process Regulations).
- The NCLT examines the application to ensure compliance with laws and regulations. Upon satisfaction, the tribunal passes a dissolution order under Section 54 of the IBC. Once the order is passed, the company ceases to exist as a legal entity. The name of the company is struck off from the records of the Registrar of Companies. The liquidator sends a copy of the dissolution order to the Registrar of Companies and other relevant authorities for record-keeping and closure of legal formalities.
Rajput Jain & AssociatesRajput Jain & Associates is a Chartered Accountants firm, with it's headquarter situated at New Delhi (the capital of India). The firm has been set up by a group of young, enthusiastic, highly skilled and motivated professionals who have taken experience from top consulting firms and are extensively experienced in their chosen fields has providing a wide array of Accounting, Auditing, Taxation, Assurance and Business advisory services to various clients and their stakeholders.
Rajput jain & Associates, a professional firm, offers its clients a full range of services, To serve better and to bring bucket of services under one roof, the firm has merged with it various Chartered Accountancy firms pioneer in diversified fields.
We have associates all over India in big cities. All our offices are well equipped with latest technological support with updated reference materials. We have a large team of professionals other than our Core Team members to meet the requirements of our prospective clients including the existing ones. However, considering our commitment towards high quality services to our clients, our team keeps on growing with more and more associates having strong professional background with good exposure in the related areas of responsibility.