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Winding up of Private Limited Company Closure

As a private limited company is a creation of law, it can be closed by procedures established by statute only. The reasons for closure could be many. However, the circumstances in which a company is being closed is what matters for the process which needs to be adopted.

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Private Limited Company Closure

A business may be required to be closed due to various reasons, like non-operation, closure of business, recurring losses, the passing of the key managerial person, the dispute among promoters, un-ability to pay debts of the company, etc. Closing or winding up of a company is a challenging task, where the directors and shareholders must first decide on the best method available under The Companies Act, 2013. To wind up the company. In case the company does not have liabilities or debts to pay it can be closed voluntarily by a unanimous decision of all the shareholders of the company and after that, an application can be filed with the registrar to strike down the name of the company from its register. However, where the company have debts to pay, or there are creditors/liabilities, or where the shareholders could not resolve to close the company, National Company Law Tribunal (NCLT) must be approached with the appropriate application.