Tuesday, 14 February 2017

Ultimate Guide to Close a Company

There are many companies that are incorporated under Companies Act 2013 and consequently it is mandatory to follow its legal compliances as well. But there are times when business becomes inoperative or defunct during the course of running such business due to one or the other reason or has been inoperative since its incorporation. Non-fulfilment of legal compliances within the time prescribed attracts numerous fines and penalties, including prohibition imposed on the directors from starting another company.

It is preferable to close or wind up such company to ensure both cost and time saving by following certain set of legal procedures as prescribed by The Ministry of Corporate Affairs. In order to ease such complex procedure of winding up of company, Ministry has decided to modify the existing route by launching ‘Fast Track Exit (FTE) mode’ for easy closure of Private Limited or One Person company with less legal formalities.

It usually takes 25 to 30 days to wind up an inoperative/defunct company and get its name struck off from Register of Companies maintained by Registrar of Companies. However a dormant company get easily and quickly wound up under the above mentioned scheme. If company has some pending litigations then it shall disclose such litigations first while applying under FTE.

Some recent updates that you would not like to miss –

1.   No SSI exemption shall be given even when assessee is using third party brand name to manufacture own goods.

2.   Provision of facilities by a club, association, society or any such body to its members shall be treated as supply, as it is included in the definition of ‘business’.

3. ‘Input Service Distributor’ can distribute SGST and IGST credit for the units located in same State.

4.   Form 49A (PAN) and 49B (TAN) needs to be digitally signed by the same director who has affixed digital signature in Form SPICe (INC-32) while registering your Company.

Have a great day ahead!

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