Company Closure Service
Starting from ₹10,000 + GST
Table Of Content
Company Closure
Company closure is a significant legal and business process that involves the dissolution of a company, terminating its legal existence. This decision is driven by various factors such as business failure, insolvency, restructuring, or strategic choices like retirement. A company closure may be voluntary or involuntary and requires careful navigation of legal frameworks and financial obligations.
Why Companies Opt for Closure There are several reasons for closing a company, including:
- Business Failures: Insolvency or inability to generate profits.
- Strategic Choices: Retirement, merger, or restructuring of business operations.
- Legal Requirements: Compliance with the legal framework that necessitates closure.
Benefits Of Proper Company Closure
Eligibility Criteria For Company Closure
Process Of The Company Closure
Step 1
All outstanding liabilities, including taxes, employee dues, and legal obligations, must be settled before closure.
Step 2
If debts remain, assets are liquidated to satisfy creditors.
Step 3
Formal notification to creditors, shareholders, and stakeholders about the company’s intent to close.
Step 4
A liquidator is often appointed to manage asset sales and address claims.
Step 5
A formal application for dissolution is submitted to the Registrar of Companies (RoC).
Step 6
After dissolution approval, the company is officially struck off the register, meaning it no longer legally exists.
Documents Required for Company Closure
FAQs
What is the difference between liquidation and dissolution?
Liquidation involves selling company assets to pay off debts, while dissolution is the legal termination of the company’s existence.
How long does the company closure process take?
The process typically takes 3-6 months, depending on the complexity of the closure and any outstanding legal or financial obligations.
Can a company with outstanding debts be closed?
No, all debts must be settled before proceeding with the closure process.
What happens to company assets during liquidation?
Company assets are sold to settle debts, and any remaining funds are distributed to shareholders.
Can a dissolved company be reopened?
No, once a company is struck off the register, it cannot be reopened.
Do creditors need to be informed of the closure?
Yes, creditors must be formally notified to allow them to file claims.
What happens if a company is not closed properly?
Failure to properly close a company can result in legal consequences and financial penalties.
Can a company still trade while applying for closure?
No, the company must cease trading for at least 3 months before applying for closure.
Is post-closure compliance required?
Yes, final tax returns and other legal filings are required to settle all obligations.
Can a dormant company be closed easily?
Yes, closing a dormant company is typically straightforward, as there are no active operations or liabilities to resolve.