STRIKING OFF THE COMPANY
Companies looking to close permanently
Companies looking to close permanently
COMPANY CLOSURE
STEPS TO CLOSE A PRIVATE LIMITED COMPANY
LIST OF DOCUMENTS REQUIRED FOR CLOSURE
Identity Proofs of Directors
PAN, Aadhar/Passport, Photograph
Documents of Company
Incorporation Documents (COI, MOA and AOA)
Previous Year's Reports and Annual Returns ( if any)
Bank Statements till date
Indemnity Bonds/Affidavits
Formats will be prepared by the team
Why Close a Private Limited Company?
Huge maintenance Costs and Penalties
Private limited company comes with its limitations. A private limited company has to mandatory file Annual ROC Returns ( AOC-4 and MGT-7) even if there are not doing any business. Delay in these forms range penalties around Rs 200 per day which ends up becoming a huge liability.
Higher Income Tax Rate
One recommends to start business with a proprietorship instead of Private Limited Company due to higher income tax rates. The corporate tax rate comes around 25% whereas the individual income tax rate comes to around 10-15% due to slab benefit. Moreover, managing proprietorship will cost a lot less compare to a company
Director Disqualification Scenario
The directors of a company can get disqualified for 5 years from being a director if the company doesn't file it's annual returns for 3 consecutive years. Closing a company permanently will prevent the defaults
FREQUENTLY ASKED QUESTIONS
Can a Company be closed without filing its annual returns?
Yes. A company can be closed by the STK-2 form even if it's returns are pending provided the company has not done any business transactions whatsoever in those years. This way, it can skip the annual filing and go for closure directly.
How long does it take to get the official order of Closure?
It takes around 6-12 months to get the official closure order from ROCs. It varies states to states and depends upon the pending applications before the Registrar.
Is anything to be done after the order is received?
The company doesn't have to file its annual returns anymore once the order is received. However, the director have to file DIR-3 KYC form every year inorder to maintain their DIN No.
Is there any Goverment Fees of the form?
Yes. The government fees of the STK-2 form is Rs 10000. Moreover there are some indemnity bonds and affidavits to be prepared for closure which will cost some more government fees.
Can a company be closed automatically?
If a private limited company doesn't file its Annual ROC Returns ( AOC-4 and MGT-7) for 3 consecutive years, the ROC may strike off the company permanently from its registers. But this will also result in disqualification of Directors u/s 164(2) for 5 years.