🔹Step-by-Step Process to Close a Company in India

Board Resolution: The First Legal Step

The first step in closing your company is passing a resolution at a board meeting. The resolution must have the majority approval of directors. This resolution formally records the company’s intention to close and starts the process of winding up.

• A certified copy of this resolution is required for filing with the Ministry of Corporate Affairs (MCA).
• If the company has shareholders, an extraordinary general meeting (EGM) may be needed for their approval.
• This resolution sets the groundwork for appointing a liquidator, settling debts, and proceeding legally.

Appointment of a Liquidator

A liquidator oversees the closure process, making sure debts are paid and assets are distributed fairly. The liquidator can be one of the company directors or an independent professional.

The liquidator’s responsibilities include:

• Preparing a detailed statement of company assets and liabilities.
• Collecting payments due to the company.
• Selling company assets to settle liabilities.
• Filing required reports with the Registrar of Companies.

Having a trusted liquidator ensures that all creditors and stakeholders are treated fairly, avoiding legal disputes.

Filing the Closure Application

After appointing a liquidator, you must file an application for closure with the Registrar of Companies. This application must include:

• The board resolution.
• Statement of accounts showing no assets or liabilities.
• Tax clearance certificate.
• No objection certificates from creditors.
• Digital signature certificates of all directors.

This filing serves as the official request to remove the company’s name from the registrar’s records, marking the formal start of closure.

Tax Clearance Certificate: Settle All Dues

Before closure, it’s mandatory to settle all outstanding taxes. This means:

• Filing all pending income tax returns and GST returns.
• Paying outstanding taxes, penalties, and interest.
• Obtaining a tax clearance certificate from the Income Tax Department.

A tax clearance certificate proves that your company has fulfilled its tax obligations. Without it, the Registrar will not approve the closure application.

Settling Outstanding Debts

One of the most critical parts of closing a company is settling debts. This includes:

• Paying all outstanding salaries and wages to employees.
• Clearing dues to suppliers, vendors, and contractors.
• Repaying loans from banks or financial institutions.
• Settling statutory liabilities like PF, ESI, and professional tax.

Our team helps you prepare a debt settlement plan, ensuring creditors receive their payments and there are no legal claims after closure.

Cancel Licenses and Permits

Once debts and taxes are settled, it’s crucial to cancel any licenses or registrations your company holds. These can include:

• GST registration
• Import-export code (IEC)
• Shops and Establishment licenses
• Industry-specific permits

Failing to cancel licenses can lead to future liabilities or legal complications, even after closure. At SSJ GST Suvidha Kendra, we handle the cancellation of all applicable licenses efficiently so you don’t have to worry about lingering obligations.

Obtain the Certificate of Closure

After completing the above steps, you can apply for a certificate of closure from the Registrar of Companies. This certificate:

• Legally dissolves your company.
• Removes its name from the Register of Companies.
• Confirms you no longer have any obligations as a director or shareholder.

With the certificate of closure in hand, your company is officially and permanently shut down under Indian law.