Due to several reasons, business owners may decide to strike off of their private limited company. There are certain steps and processes to be followed when closing a private limited company. Business owners must abide by certain legal laws and regulations when closing a company which is registered as a private limited company.
On approval of the closure, the company’s name is removed from the register and so, it is not existent in the eyes of laws. The company must fulfil all the compliance before proceeding for the closure application. The application is accompanied by various documents and requires assistance from the professional.
Ways of winding up of a company in India
This option is chosen when the company is in the operative stage and has assets and liabilities. It will include approval from Members, Directors, and creditors. It also requires appointing a liquidator for the said process to manage the company’s affairs throughout the all process. It is often time-consuming process.
Striking off is chosen by a company which has relatively no or less outside liabilities. When a company is inoperative since its inception or in the past two years, it may apply for strike-off, often referred as fast-track exit. The primary condition is that the company has no assets or liabilities and has complied with relevant applicable provisions.