Closure of Company in India

 Closure of Company in India

In India, the closure of a company is a process of winding up or dissolving the business operations of a company. This can happen due to various reasons, including financial difficulties, lack of profitability, legal issues, retirement of the owners, etc. The process of closure of a company in India is governed by the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016.

A registered Company may face difficulties to carry out its business operation due to adverse business conditions or lack of finance. Due to such business conditions, the shareholders/directors may lose interest and intention to carry further business activities. The government has given an option for voluntary closure of Company, using which an company may apply to strike off or remove its name from the register, which is maintained by the ROC.

It's important to note that the process of closing a company in India can be complex and time-consuming. It's advisable to seek the assistance of a professional, such as a chartered accountant or a company secretary, to ensure that the process is completed correctly and in a timely manner. 

Advantages Of Voluntary Closure of Company in India

  • Easy exit opportunity for Entrepreneur’s

The process of closing a company by way of strike off is easy and convenient for entrepreneurs. The process of application for closure can be done online and further the Registrar will close the company if there is no objection from Regulators within 10-12 months of time.

  • Avoid requirement of yearly Compliances

A company has to file certain annual returns and documents every year to the Registrar of Companies (ROC) and other regulatory authorities. In a case, the company is not doing any business or does not foresee any business in the coming years, then it can proceed towards closure of the Company in order to avoid the cost of yearly compliances.

  • Avoid burden of Penalties

When a Company does not comply with the requirement of filing a financial statement, annual return, or any other statutory forms, a heavy monetary penalty and additional government fees may be imposed on the Company and its directors. Therefore, to avoid such consequences, closure of the Company is always a better option.

Read more- All you need to know about Online Closure of Company in India

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