How to Close an Inactive Company Legally: Step-by-Step ROC Guide
Closure of Company Wind Up
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Conclusion of a business organization is the procedure whereby the name of the company gets struck off the list of companies registered under the Registration of Companies. This is done through the procedure stipulated in the Companies Act 2013.
A company may consider closure when:
- The business is no longer operational.
- The promoters do not wish to continue the business.
- The company has no assets or liabilities.
- The company has remained inactive for a long period.
A company can be closed through:
Voluntary Strike Off under the Companies Act, 2013.
Winding Up through the Tribunal, where applicable.
The Insolvency and Bankruptcy Code provides for the liquidation of companies.The Insolvency and Bankruptcy Code is a law that allows for the liquidation of companies.
The commonly required documents include:
Board Resolution.
Special Resolution or shareholder consent.
Indemnity Bond.
Affidavit by Directors.
Statement of Accounts certified by a Chartered Accountant.
PAN Card of the Company.
Certificate of Incorporation.
Copy of the latest financial statements.
Identity proof of directors.
The timeline varies depending on the company’s compliance status and ROC processing. Generally, the process takes 60 to 120 days, subject to verification and approval.
Yes, in most cases a company can only be closed with the approval of the shareholders Before initiating the closure process the company must pass a Special Resolution or obtain the consent of the required majority of shareholders as prescribed under the Companies Act 2013The resolution gives the directors permission to close the company.
The approval process typically involves:
A General Meeting or obtaining the necessary shareholder consent by passing a Special Resolution.
- Documenting the decision in the minutes of the meeting.
- Submitting the required forms and resolutions to the Registrar of Companies
- Completing all statutory compliances or outstanding liabilities or taxes and regulatory requirements prior to closure
Closing an inactive company is beneficial:
Avoid annual compliance expenses.
Save on annual compliance costs.
Never pay for failure to file.
Keep directors safe from future compliance problems.
Yes. It is possible to wind up a private limited company voluntarily if it fulfill certain conditions.
Yes. A dormant company that meets the prescribed legal conditions and has no liabilities can apply for closure through the appropriate procedure.