Introduction

Since 2015-16 (Post-Demonetization), the Ministry of Corporate Affairs (MCA) and the Government of India have introduced several measures to support businesses, stakeholders, and directors. These initiatives include exemptions for private limited companies, the CODS Scheme (2018), the Companies Amendment Bill (2017), and even zero incorporation fees for new companies. These changes were widely welcomed by business owners and stakeholders.

However, on the flip side, many companies failed to comply with essential requirements such as opening a bank account, filing income tax returns, annual returns, and audited financial statements on the MCA portal.

To address this issue, the MCA enforced stricter regulations against non-compliant businesses, shell companies, and defaulting directors. Several key amendments were introduced, including:

• Disqualification of Director Identification Numbers (DIN) for five years
• Mandatory e-Form INC-20A (Proof of opening a company bank account)
• Yearly KYC compliance for directors via e-Form DIR-3 KYC (Non-compliance leads to a ₹5,000 penalty per director)
• Filing of DPT-3 for secured/unsecured loans & deposits (from 2019)
• Introduction of Form MSME-1
• Late filing penalty of ₹100 per day for AOC-4, AOC-4 CFS, AOC-4 XBRL (Financial Statements) and MGT-7 (Annual Returns)
• Introduction of MGT-7A for OPC and small companies

To streamline the process for defunct or inoperative private limited companies, the MCA has simplified the closure process. Below are the key provisions for closing a private limited company under Calzone's expert guidance.

When Can a Private Limited Company Be Closed?

A private limited company can apply for closure under the following circumstances:

• No Business Activity Since Incorporation - If the company has not commenced operations within one year of incorporation.
• No Business Activity in the Past Two Financial Years - If the company has not carried out any business transactions in the last two years and has not applied for Dormant Company status under Section 455 of the Companies Act, 2013.
• Non-Payment of Subscription Money - If the subscribers to the Memorandum of Association (MOA) have not paid their subscription money within 180 days of incorporation.

Step-by-Step Process for Closing a Private Limited Company

According to Rule 11 of the Companies (Appointment and Qualification of Directors) Rules, 2014, a DIN may be surrendered, canceled, or deactivated under the following circumstances:

• Step 1: Settle All Liabilities

Before applying for closure, the company must clear all outstanding liabilities.

• Step 2: Conduct a Board Meeting
  • Hold a Board Meeting to approve the voluntary closure.
  • Issue a notice for an Extraordinary General Meeting (EGM).
• Step 3: Convene the EGM
  • Pass a special resolution approving the closure.
• Step 4: File e-Form MGT-14
  • File e-Form MGT-14 with the Registrar of Companies (ROC) to report the special resolution.
• Step 5: Submit e-Form STK-2
  • File an application for strike-off with ROC using e-Form STK-2 along with mandatory documents (listed below).
• Step 6: ROC Approval & Strike-Off Notice
  • Once the ROC verifies the application, the company name is removed from the records.
  • The strike-off is published in the official gazette via Form STK-7.

Need to surrender your DIN? Calzone ensures a legally compliant and quick process.

Documents Required for Private Limited Company Closure

Key Points to Note Before Filing for Voluntary Closure

• Flat Statutory Fee: The e-Form STK-2 filing fee is ₹10,000.
• Pending Filings Must Be Cleared: Any overdue AOC-4 and MGT-7 forms must be filed before applying for closure.
• Certification by a Professional: The e-Form STK-2 must be certified by a practicing Company Secretary, Chartered Accountant, or Cost Accountant.
• Restrictions on Closure: A company cannot apply for closure if, in the last three months, it has:
  • Changed its name or shifted its registered office to another state.
  • Disposed of any property or assets, except in the ordinary course of business.
  • Engaged in any activity except for closure-related formalities.
  • Applied for a compromise or arrangement with creditors, which is still pending before a tribunal.
  • Is currently undergoing winding-up proceedings under the Companies Act, 2013 or IBC 2016.

How Calzone Can Help You

Closing a private limited company requires expert guidance to ensure compliance with MCA regulations and avoid penalties. At Calzone, we provide:

• Hassle-free consultation to assess your eligibility for closure.
• End-to-end documentation support, including preparing & filing necessary forms.
• ROC communication & compliance handling to streamline the process.
• Affordable pricing with zero hidden charges.