You can close your public limited company in India by following our 7-Step Guide. The Process to close a public limited company in India is also known as Strike off, Winding Up, or Company Closure.
If you’re not running your business and not even filing compliance, it is advisable to close your Public Limited Company and avoid being in defaulter. If your company is a dummy, defunct or non-operative, it is recommended to close it to avoid future penalties.
Closing a Public Limited Company in India
The process to close your public limited company in India is a little sophisticated but not much difficult. A Public Limited Company may be closed voluntarily by its shareholders or compulsorily by the judiciary. A Public Limited Company requires a minimum of 3 Directors as a prerequisite. However, the majority of directors must agree for winding up the company.
The Ministry of Corporate Affairs (MCA) has revised the rules for winding up companies to exit through electronic filing after the initial request. The Process of closing a Public Limited Company can be done under the newly notified Companies (Removal of names of companies from the register) Amendment Rules 2022.
Close Your Public Limited Company in India 7 Easy Steps
If your company is nonoperative and you have decided to permanently close your Public Limited Company, you can follow our step-by-step guide to close your company easily.
You can apply along with the government fees and required documents for the closing of your company. A Company closure can be filed after the following 7 easy steps:
Step 1 – Clear all Liabilities: The first step is to clear all the liabilities of your public limited company and get a NOC (No Objection Certificate). However, if you have registered a public limited company but did not start your business/operations yet, then this clause does not apply.
Step 2 – Get the Board Resolution: The Board Resolution for the closure of the company is required. You should obtain a Board Resolution approved by the Board Members for closing the Public Limited Company.
Step 3 – Get the Consent of Shareholders and Creditors: The second step is to get the consent of the shareholders and creditors of the company. To wind up the public limited company, you need to get at least 75% consent from the shareholders and creditors of the company. One director also needs to be notified who will take care of all the responsibility for filing company closure.
Step 4 – Prepare Documents: After receiving the consent and notifying a director, the next step is to prepare all the required documents to file along with the application.
Step 5 – Application Filing: A duly completed application needs to be filed with MCA signed by the director of the company authorized for company closure. The application needs to be certified by a company secretary, Chartered Accountant, or Cost Accountant in whole-time practice. Do not forget to attach the required documents.
Step 6 – Company closure Public Notice: When the windup application is filed, the registrar will verify it and publish a notice in the official gazette if it is in order. An English and vernacular language newspaper must publish the public notice at least once. Other regulatory authorities, such as Income Tax, Sales Tax, and Service Tax, will receive a notice of intimation from the Registrar. When the authorities with jurisdiction over the company do not object within 30 days of the date of the notice, it is presumed that they do not object to the proposed action of striking its name.
Step 7 – Closing of the company: Once all the procedures are completed, the registrar shall publish a notice in the prescribed format in the Official Gazette and dissolve the company.
Documents Required for Public Company Closure
The following documents required for public company closure:
- Application for Striking off of the Public Limited Person Company
- Indemnity Bond notarized by Directors
- Statement of Accounts latest
- Statement of Accounts containing assets & liabilities of the Company Audited by CA.
- Affidavit in Form STK 4 by every Company.
- Special Board Resolution and Consent of 75% of Members.
- Bank Account Closure Certificates
- PAN Card of the Company.
- Consent of Directors
- Director’s Affidavit
- Name, Contact Number and Email Id of all the Stakeholders.
- Directors Identification Number, if already.
- Self-Attested PAN, Aadhar & Passport size photo of all the Stakeholders.
- PAN, TAN, COI, Share Certificates of the Company.
- NOC from commercial departments
- Previous Year’s Audited Financials & Tax Reports
The process of closing a public company generally takes between 6 months and 24 months.
If you want to know more about closing a various types of companies in India, click here.
For necessary approvals and closure of the company, there are many documents to be prepared and filed. Therefore, it is recommended to take the help of a legal advisor.
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