Close a Company

In India, every year more than one lakh Companies get registered and majority of them do not even start their business. The Founders of these companies go back to their jobs or get aside leaving the business as it is.

Did you know? It may cause you (as Director) troubles from the Regulatory Department like Income Tax, Registrar of Companies and others. Yes, you read it right. It is a prudent idea to close down the company to get relief from litigation and at the same time saving your DIN getting disqualified.

We at Compliance Calendar LLP have a team of Experts who can help you close your company hassle free. You just have to share your company details, assist us in complying with the Fast Track Exit Scheme for closure of company and leave the rest on us. We have helped plenty of companies in successful closure like yours.

We can be reached at info@ccoffice.in or +91-9988424211 on Call/WhatsApp.

Fast Track Exit (FTE) can be done in two ways:

Suo Moto by Registrar

The ROC 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 and has not sought the status of Dormant Company.
The Registrar sends a notice (STK-1) of his intention to remove the name and seeks the representation of Company in 30 days.
Liability on the Directors of the company still exists. ROC can invoke penalty clauses anytime and you may fall in troubles.

Voluntary Removal of Name using Form STK 2

The company can also move an application to Registrar of Companies for striking off the name by filing form STK-2 along with a fee of Rs 10,000/-. Once the form is filed, the Registrar has power and duty to satisfy himself. The 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. This is the safe route and your DIN is saved from getting disqualified.

WHO ARE ELIGIBLE FOR COMPANY CLOSURE UNDER FTE?

Application for voluntary removal of names of Companies from Register under sub section (2) of Section 248 can only be filed by the following companies:

Company Failing commencement of business within one year of Incorporation; or
Company not doing business for 2 years and has not made any application within such period for obtaining the status of dormant company under section 455.

Documents Required for Close a Company

For filing Income Tax returns, we need from you the accurate information on income, deduction and TDS paid. Here is a checklist of what we need for e-Filing your Income Tax returns:

Copy of Board Resolution;
Copy of Special Resolution certified by each of the directors of the company or consent of seventy-five percent of the members of the company in terms of paid up share capital as on the date of application;
Indemnity Bond duly notarized from every director individually or collectively effect that any losses, claim and liabilities on the company, shall be met in full by every Director individually or collectively, even after the name of the company is struck off the Registrar of Companies in Form STK-3;
An Affidavit in Form STK-4, sworn by each of the existing director/directors before a First Class Judicial Magistrate/Executive Magistrate/Oath Commissioner/Notary, to the effect that the company did not carry on any business since incorporation or that the company did some business for a period up to a date and then discontinued;
Statement of Accounts containing assets and liabilities of the company prepared up to a day, not beyond thirty days before the date of application and Certified by a Chartered Accountant;
Bank account closure certificate;
Self-attested KYC of Directors of the Company along with the copy of PAN Card of the Company;
Digital Signature Certificate (DSC) of Directors to file form STK-2; and
Any other documents as may be required by the concerned ROC.

Legal Procedure of Close a Company

Below are the Steps for e-Filing of Income Tax Return for Salaried Persons:

Call Board Meeting giving a notice of not less than 7 days for approving the strike off and authorize to Director for filing the application with the ROC;
Set off liabilities of the Company after passing the Board Resolution;
Call the Extra Ordinary General Meeting of the members and pass a special resolution approving the application for strike off;
File e-form MGT-14 within 30 days of passing the special resolution with the Registrar of Companies;
An application for removal of the name of the company shall be made in Form STK-2 along with the fee of INR 10,000 along with the necessary documents under sub-section (2) of section 248;
E-Form STK-2 shall be certified by Practicing Professional (Company Secretary/ Chartered Accountant/ Cost Accountant in whole time practice); and
The concerned ROC may ask for the annual filings of the companies or some additional information/clarifications depending on the case to case basis.

Features & Benefits of Close a Company

Faster Route: The best feature of company closure under FTE Scheme is that you need not comply with the lengthy winding-up procedure which is not only time taking procedure but also cost much more than what it costs in FTE Scheme which ultimately helps you save every year compliance cost.
No Record Keeping: Once your company get closed and the name of your company is removed from the register from ROC, you need not keep any company records and documents year on year basis.
No more director in Default: You save your DIN and later on you can join any other company and also incorporate other companies if your DIN is not in default due to non-filing in other companies.
Save from Income Tax: If you do not close your company properly, the Income Tax Department can send you notice for not filing returns or may even come up with unnecessary IT demands.
Peace of mind: You live worrying less as your mind would be productive. It is always wiser to shut down something which starts becoming liabilities for you and disturb your peace of mind and health.

Frequently Asked Questions

What is Closure of Company and how can it be closed?

When the purpose of the company is not served and it is not able to generate profits for its shareholders, the existence of the company is closed legally by filing necessary forms to the Govt. Dept. The MCA has launched a new scheme for those who could run their companies due to any reasons and now want to close the company by spending less and be relieved.

Which companies can file for Company Closure Scheme?

Any Company which is not a Section 8 Company and has been inoperative for more than 1 year from the date of its incorporation or has not done any business for last two financial years can apply for Closure of Company under FTE scheme.

How to close a company which is inoperative and not having any business?

A company which is eligible under Fast Track Exit (FTE) Schemes can apply for company closure by filing form STK-2 with the concerned ROC with necessary documents as required under the Companies Act, 2013.

My company did not have any business and not have even current account, can it be closed under the fast track exit scheme?

Yes, just make sure first that your DIN is active and the company has already not been struck off by the ROC. You can share your company details and we will provide a free consultation to assist your further in this matter.

What is the procedure to remove a company name from register of ROC?

To do this, we file form STK-2 for the removal of your company name from the Register of Companies and which are non-functional over a period of time. It is the quickest and easiest way of Exit Called Fast Track Exit which saves the company from going into lengthy liquidation process involving Court/Tribunal Intervention.

What are the cost involved in closing of the company under FTE Scheme?

The form filing fees of form STK-2 is Rs. 10,000/- and rest is all about the documentation charges and professional fees. Get in touch with us to get a free quotation from CCL. Our Compliance Manager would be more than happy to provide you all the information you may require.

How can Compliance Calendar LLP can help you in company closure?

We are the market experts in compliance and keep you informed with all the changes taking place in the Indian Companies Act, 2013. We can help you with end to end services in getting your company closed legally and save you from any non-compliance. It is a legal process so it is prudent to assign the work to a professionally managed firm.

Any confusion or query bothering you?

Not to worry at all! Someone from our experienced team will resolve all your queries. Our Company Closure Experts will help you to give you the best advice without any consultancy fees. Get in touch with us. Write to us at info@ccoffice.in or WhatsApp/Call us +91-9988424211.

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