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PVT. LTD. Winding Up

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PVT. LTD. Winding Up

Closing a Company the Right Way with Legal Compliance

Sometimes, continuing business operations may no longer be feasible due to financial losses, inactivity, compliance burden, or business restructuring. In such cases, the company needs to be legally closed (wound up) to avoid penalties and future liabilities. The winding up of a Private Limited Company is regulated under the Companies Act, 2013 and must be done in a structured, compliant manner.

Modes of Winding Up a Private Limited Company

  1. Voluntary Winding Up

    • Initiated by the shareholders/directors when they decide to close the company.

    • Requires passing a special resolution in the General Meeting.

    • Ideal when the company is solvent and can pay off its debts.

  2. Compulsory Winding Up (by Tribunal)

    • Ordered by the National Company Law Tribunal (NCLT) in cases such as:

      • Inability to pay debts.

      • Fraudulent or unlawful activities.

      • Failure to file financial statements or annual returns for 5 years.

      • Just and equitable grounds as decided by the Tribunal.

  3. Fast Track Exit (FTE) / Strike Off

    • A quicker method under Section 248 of the Companies Act, 2013.

    • Applicable for companies that are inactive for more than 2 years or never commenced business.

    • Application filed in Form STK-2 with the Registrar of Companies (RoC).

Process of Winding Up

For Voluntary Winding Up

  • Step 1: Convene a Board Meeting and pass a resolution.

  • Step 2: Conduct a General Meeting and pass a special resolution.

  • Step 3: File necessary forms with RoC & Official Liquidator.

  • Step 4: Appoint a liquidator to settle debts and distribute assets.

  • Step 5: Submit final report and application for dissolution.

For Strike Off (Fast Track Exit)

  • Step 1: Board resolution for strike off.

  • Step 2: Filing Form STK-2 with the RoC.

  • Step 3: Submission of documents (indemnity bond, affidavit, statement of accounts, etc.).

  • Step 4: Approval by RoC and issue of dissolution notice.

Documents Required

  • Board and Shareholder Resolutions

  • Affidavit by Directors

  • Indemnity Bond

  • Statement of Accounts (not older than 30 days)

  • PAN, MoA, AoA of the Company

  • Consent of Creditors (if any)

  • Form STK-2 (for Strike Off)

Benefits of Legal Winding Up

  • ✅ Avoid Penalties – No future compliance burden with MCA, Income Tax, or GST.

  • ✅ Peace of Mind – Free directors from legal liabilities.

  • ✅ Cost-Effective Closure – Fast track exit avoids lengthy litigation.

  • ✅ Compliance Proof – Certificate of dissolution as legal proof of closure.

  • ✅ Protects Credit History – Helps promoters start new ventures without past liabilities.

Why Choose India Tax Filing for Winding Up?

  • 📌 End-to-End Assistance – From resolutions to filing final forms.

  • 📌 Expert Legal Support – Ensure compliance with MCA and NCLT requirements.

  • 📌 Quick & Hassle-Free – Smooth execution under Voluntary, Tribunal, or Strike Off modes.

  • 📌 Affordable Pricing – Transparent packages with no hidden charges.

  • 📌 Dedicated Support – Personalized guidance until company dissolution.