Business Closure

Even if closing a private company is a hard deal, a loss making company needs to be restructured or closed. If restructuring is not a good option, then closing it down reduces legal and compliance cost, rent or any other out of pocket costs. Closing a company which is falling apart reduces the risk of losing the invested assets. There is no sense at all in running the loss-making Private enterprise just for compliance sake.

Through Fast-track Exit Mode, a Company can easily shut down its business. Closure of the company is done voluntarily through the fast track exit scheme.

On the other hand, Winding up is forced by a court order and dissolution is initiated by a court after expiry of time period or after company’s mission is accomplished.

• Review by business experts to find if the Private Company eligible for an exit.
• All requisite Fast Track Exit documents are prepared in 10-12 working days by our experts.
• The e-form STK-2 will be filed with MCA
• The Registrar will issue public notice
• The Registrar will strike off the name of the Company from the Register and shall publish it in Official Gazette.

1. Statement of accounts reflecting zero assets and liability expect share capital and Profit and Loss Debit balance
2. Indemnity Bond
3. Affidavits
4. Copy of Board and Shareholders’ Resolution

Sometimes it becomes necessary to close down one’s business owing to a number of reasons. The business of LLP can be closed down through any of the following 2 ways:

Where the Parties to an LLP wishes to close down its business or where the LLP is not carrying on any business for a period of more than one year, they can make an application to the Registrar for declaring the LLP as defunct and removing the name of the LLP from its register of LLP’s. This can be done through filing of e-form 24.

On the other hand, the ROC has the power to strike off any defunct LLP. In such a case, a notice will be served on LLP asking to make representation within one month from the date of service of notice. On non-receipt of reply, the ROC may strike off the name of LLP.

• Preparation of Statement of Accounts
• Closure of bank accounts of the LLP
• Hold a meeting of Designated Partners and pass resolution for closure of LLP
• Drafting of Affidavits and Indemnity Bond
• Filing of e-form for Closure
• Tracking the status in MCA Website

• Affidavits verifying that the LLP has ceased to carry on commercial activity or has not commenced any business.
• Letter evidencing closure of bank account.
• No due Certificate.
• Latest filed Income Tax Return or acknowledgement.
• Indemnity bond declaring that the LLP has no liabilities and indemnify any liability that may arise even after striking off.
• Consent of Designated Partners in the form of Board Resolution.
• Statement of Assets and Liabilities.

An LLP can be wound up through any of the following 2 modes:

1. Voluntary winding up which is done upon the decision of Designated Partners

• Passing resolution for winding up.
• Filing of Declaration of Solvency along with the Statement of Assets and Liabilities and Valuation Report.
• Obtaining consent of creditors, if any.
• Filing declaration with respect to consent of creditors.
• Issuing Newspaper Advertisement.
• Appointment of Liquidator.
• Report of Liquidator to ROC and Tribunal.
• Passing of order of winding up by the Tribunal.
• Filing of Order with the ROC.
• Publishing in Official Gazette by ROC that the LLP stands dissolved

• Consent of Partners and Creditors
• Declaration of Solvency
• Statement of Assets and Liabilities
• Valuation Report from a Registered Valuer
• No due Certificate.
• Letter evidencing closure of bank account.

• If an application has been made by the Designated Partners;
• If the number of partners falls below 2 for a period of more than 6 months;
• If the LLP is unable to pay its debts;
• If the LLP has acted against the interests of the sovereignty and integrity of India, the security of the State or public order.
• If the LLP has failed to file Statement of Account and Solvency or annual return for any 5 consecutive financial years; and
• If the Tribunal believes that it is just and equitable to wind up the LLP.

• The petition or an application for winding up of an LLP to be filed with the tribunal.
• The Tribunal fixes the date of hearing, issues notice to the LLP to appear and justify its position and also issues a public notice to inform everybody.
• The Tribunal passes the Winding-up order.
• Filing of Order with the ROC.
• Publishing in Official Gazette by ROC that the LLP stands dissolved.