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My Registration

Winding Up a Private Limited Company

Looking Forward to Close Your Pvt. Ltd. Company? Here Are Some Vital Rules to Follow!

What are Some Important Rules for Closing a Private Limited Company?

What do you understand by a Private Limited Company? It is an organization that is held privately by some of its respective members. The liability of the members is exclusively limited to some shares that are held respectively by them. Fortunately, the shares cannot be traded at any cost.

Private Limited refers to a specific company that comprises a minimum paid share capital. The amount is prescribed by the articles that are mentioned by the Company Act of 2013. It ensures restriction to the right the shares get transferred. Whenever there are more than two persons responsible for holding the shares of a company jointly, the members are treated as a single member for the respective clause.

What are Some Exclusive Advantages Associated with a Pvt. Ltd. Company?

There are highly remarkable benefits associated with a Private Limited Company. Some of them include the following:

  • Ownership – Unlike a public company, the shares of a private limited company can be easily sold or transferred by the owner according to the wish. The shares are owned by the founders, investors, and management. Hence, they cannot be sold at any cost in the open market.
  • A minimum number of shareholders – Just like a Public Limited Company comprises of minimum five shareholders, the case is reversible in the case of a Private Limited Company. Minimum two shareholders are required in a private limited company.
  • Legal compliances – Legal compliance is another vital factor that is associated with a Private Limited Company. As the number of shareholders is minimum in a private limited company, decision making becomes easy and smooth. However, carrying out the management-related tasks becomes easy through consultation.
  • Minimum share capital – The minimum investment required in the case of a Public Limited Company is much higher. Whereas, in the case of a Private Limited Company; the amount of share required is much less. Also, no such minimum compulsion is required.
  • Highly Continuous Existence – Another remarkable benefit associated with a Private Limited Company is that its existence continues even after the demise of the owner. If any one of the shareholders resigns, still the company will continue with its operations.

These are some exclusive benefits associated with a private limited company. Interested to know about some of the exclusive features associated with the same? Here they are….

Remarkable Features Associated with a Private Limited Company

The respectable features associated with a Private Limited Company are as under:

  • Several members – To form a private limited company, a minimum of two members and a maximum of two hundred members are required. It is as per the Companies Act of 2013.
  • Limited liability – The amount of liability of the members associated is limited to the number of shares held by them. The personal assets owned by the shareholders are hardly at any risk.
  • Registration of the members – Unlike a public limited company, it is not at all mandatory to maintain a register for the members. Also, the minimum number of directors required by the company is two.
  • Paid-up capital – There is a minimum amount of money required in the case of a Private Limited Company. Still, as per the recent declaration; no such amount has been specified legally.
  • Name – At the time of assigning a name to the business, it is important to choose the name carefully. The business must use the words "Private Limited Company" at the end of the name.

These are some vital features that must be followed by a Private Limited Company.

What is the Procedure of Closing a Private Limited Company?

There are times when there remains no other alternative other than closing the company. Want to know how to close Pvt. Ltd. Company? Here it is….

Various reasons are associated with the closing of your company. Some of the vital ones include the following:

  • Officially closed companies that are no longer bound to maintain the regulatory compliances
  • No occurrence of any fine or penalty and causing if debarment of directors from moving forward
  • Closing refers to a simple procedure in the case of inoperative companies. There are certain steps required for extinguishing any liabilities.

Certain documents are required at the time of closing a private limited company. Some of the most important ones include the following:

  • Board meeting resolution
  • Notice and special resolution of EGM
  • Notice to the Registrar to appoint the Liquidator
  • Notice in the official gazette
  • Advertising the same in the newspaper
  • Filing of the affair statement and MGT 14 form

Some Important Rules Associated with the Closing of Private Limited Company

Are you aware of the rules for closing Pvt. Ltd. Company? If no, then below are some of the vital ones that must be followed so that the process takes place smoothly:

  • Paying all liabilities – First and foremost, it is very much essential to repay all the liabilities of the company. Also, a No Objection Certificate must be obtained.
  • Need almost seventy-five percent consent – This is another vital requirement that must be complied with for the closing of the company. For winding up, at least seventy-five percent consent is required from the shareholders of the company. One director must also be notified for taking care of the responsibilities for the closure of the company.
  • Preparation of an application – The moment the consent gets assigned, preparation of the application remains the next step. Also, the application must be filed with the ROC.

Some of the vital reasons that result in the closure of the company include no smooth running of the company and not complying with the law. As a dummy company may result in paying a high penalty, closing the same company will be a great decision.

Why Choose MyRegistration?

If you are planning to close your private limited company, then better opt for MyRegistration. There is a team of experts that will help you in this regard from the scratch. Regarding the documentation and other exclusive procedures, you will be provided with the best guidance. For more details, feel free to visit our website and leave a query. We will be glad to assist you in this regard.