Private Limited Company Closure in India is a legal process through which a company that is inactive, non-operational, or no longer required is formally removed from government records. Closing a company properly is essential to avoid penalties, compliance burdens, and future legal issues.
In this Saving Mantra guide, we explain what private limited company closure is and provide a step-by-step process to close a Private Limited Company in India, including eligibility, documents, and timelines.
What is Private Limited Company Closure?
Private Limited Company Closure is the process of legally dissolving or striking off a company registered under the Companies Act, 2013. Once closed, the company ceases to exist as a legal entity and is removed from the records of the Registrar of Companies (ROC).
Methods to Close a Private Limited Company in India
1. Fast Track Exit (Strike Off – Form STK-2)
- For companies that are inactive or not carrying on business
- Faster and cost-effective method
2. Voluntary Winding Up
- Used when company has liabilities or disputes
- Lengthy and court/tribunal-driven process
(Most small and inactive companies prefer Strike Off method)
Eligibility for Private Limited Company Closure (Strike Off)
A company can apply for strike off if:
- It has no business operations
- It has no outstanding liabilities
- All statutory compliances are completed
- It has closed its bank accounts
- It is not involved in litigation
Benefits of Closing a Private Limited Company
- Avoid ongoing ROC compliance costs
- Prevent penalties and late fees
- Remove inactive company from records
- Peace of mind for directors and shareholders
Step-by-Step Process to Close a Private Limited Company in India
Step 1: Board Meeting
Conduct a Board Meeting to approve the company closure and authorize a director to file the application.
Step 2: Close Bank Account
Close the company’s bank account and obtain closure proof.
Step 3: Settle Liabilities
Ensure all assets are disposed of and no liabilities remain.
Step 4: Prepare Documents
Prepare affidavits, indemnity bonds, and statements of accounts certified by a Chartered Accountant.
Step 5: File Form STK-2
Submit Form STK-2 to the MCA along with required documents and government fee.
Step 6: ROC Verification
ROC examines the application and may ask for clarification or additional documents.
Step 7: Public Notice
ROC publishes a public notice inviting objections (if any).
Step 8: Strike Off Order
If no objections are received, ROC issues the Strike Off Order, and the company is officially closed.
Documents Required for Private Limited Company Closure
- Board Resolution
- Shareholders’ consent
- Affidavit and Indemnity Bond from directors
- Statement of Accounts (not older than 30 days)
- PAN Card of company
- Certificate of Incorporation
- Bank account closure proof
Time Required for Company Closure
- Strike Off process generally takes 3 to 6 months, depending on ROC workload and document accuracy.
Consequences of Not Closing an Inactive Company
- Continuous ROC penalties
- Director disqualification risk
- Legal notices from MCA
- Accumulated compliance burden
Why Choose Saving Mantra for Private Limited Company Closure?
- Expert handling of STK-2 process
- Accurate documentation and filings
- Transparent and affordable pricing
- Quick turnaround time
- End-to-end MCA compliance support
Conclusion
Closing a Private Limited Company in India is a crucial step if the business is inactive or no longer required. By following the correct step-by-step company closure process, directors can avoid penalties and ensure full legal compliance. Saving Mantra provides a smooth, professional, and hassle-free Private Limited Company closure service.
Disclaimer
The information provided in this blog is for general informational purposes only and does not constitute legal, tax, or professional advice. Company closure rules, procedures, and timelines may change as per amendments to the Companies Act and MCA guidelines. Readers are advised to consult qualified professionals before initiating Private Limited Company closure in India.