What is the Procedures for shutting down a private limited company in India?

Procedures for shutting down a private limited company in India.

  1. Up-to-date returns (viz., Annual Return and Balance sheet) has to be filed with Registrar of Companies (ROC)
  2. A statement of account has to be prepared one month prior to the submission of application u/s 560 stating that no assets and liabilities except share capital and P&L debit balance.
  3. An Affidavit needs to be executed (Rs. 20 Stamp Paper) and to be notarised (signed by for all director)
  4. An Indemnity to be executed (Rs. 100 stamp paper) (signed by all director)
  5. If there is any unsecured loan, then waiver letter should be submitted.

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Timeframe: About 2 months

Charges: About Rs. 25,000.

Regarding your other query…

If you join the other company and earn income, then at the end of the financial year, you will have to combine the income earned at both organisations and calculate the total tax liability and remit the tax (after adjusting the taxes paid through both the organisation).

WINDING UP OF THE COMPANY UNDER SECTION 560 OF THE COMPANIES ACT, 1956.

  • A Company can be wound up under section 560 of the Companies Act, 1956. For this, the Company should be defunct company i.e. a dormant company with NIL Assets and NIL Liabilities i.e. all the assets should be disposed off and all liabilities should be cleared.
  • For this purpose, the Company should prepare audited Accounts for the period ending not later than 30 days from filing the winding up application. Said accounts should show NIL Assets and NIL Liabilities.
  • Documents to be submitted to ROC:

1 An application signed by minimum 2 Directors in case of Pvt. Ltd. And 3 Directors in case of Public  Ltd. (preferably by all the Directors of the Company) (Annexure A);

2 Indemnity Bond signed by minimum 2 Directors in case of Pvt. Ltd. And 3 Directors in case of Public Ltd. (preferably by all the Directors of the Company) and Notarised (Annexure B);

3 Affidavit signed by minimum 2 Directors in case of Pvt. Ltd. And 3 Directors in case of Public Ltd. (preferably by all the Directors of the Company) and Notarised (Annexure C);

4 Signed copy of latest audited Balance Sheet showing NIL assets and NIL liabilities; and

Certified copy of Board Resolution (Annexure D).

  • After the Registrar is satisfied that the Company is defunct and has no assets and liabilities, he will issue notice to the Company for striking off the name from the register giving some time to withdraw the application, if required.
  • After the expiry of the time limit, he will issue notice thereby striking off the name of the Company from the Register maintained by him and will send the same to publish in the Official Gazette. Once the said notice is published in the Official Gazette, the Company stands struck off from the Register.

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