How to Close a Company in India

Closing a company in India involves several steps and legal procedures. Here is a general guide on how to close a company in India:

  1. Board Meeting:
    • Call a board meeting to discuss and pass a resolution for winding up the company.
    • Obtain the consent of the majority of directors for the winding-up resolution.
  2. Shareholders' Meeting:
    • Call a shareholders' meeting to obtain their approval for winding up the company.
    • Pass a special resolution with the consent of shareholders representing at least three-fourths of the total voting rights.
  3. Appointment of Liquidator:
    • Appoint a liquidator to oversee the winding-up process. The liquidator can be an individual or a firm qualified to act as a liquidator.
  4. Public Notice:
    • Publish a public notice in a newspaper circulating in the district where the registered office of the company is situated. The notice should announce the decision to wind up the company.
  5. File Notice of Winding Up:
    • File a notice of winding up, along with the resolutions and other required documents, with the Registrar of Companies (RoC) within 30 days of passing the special resolution.
  6. Settlement of Liabilities:
    • The company should settle all its outstanding liabilities, including debts, loans, and any dues to creditors, suppliers, and employees.
    • Pay off all taxes, including income tax, goods and services tax (GST), and other applicable taxes.
  7. Clearance from Authorities:
    • Obtain clearance certificates from various authorities, such as tax authorities, labor departments, and any other regulatory bodies applicable to your specific industry.
  8. Settlement of Assets:
    • Dispose of the company's assets and properties as per the provisions specified in the Companies Act, 2013.
    • If there are any surplus funds remaining after settling the liabilities, distribute them among the shareholders as per their entitlement.
  9. Final Accounts and Reports:
    • Prepare the final accounts of the company, including balance sheets and financial statements, up to the date of winding up.
    • Prepare a liquidator's report detailing the winding-up process, assets, liabilities, and distribution of surplus (if any).
  10. Dissolution and Strike-off:
  • File an application for the dissolution and strike-off of the company with the RoC.
  • The RoC will review the application and, if satisfied, will issue a certificate of dissolution, officially closing the company.

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