Closure of Company

Closure of company is removing the name of the company from the register under the registrar of companies which is applied before the ministry of corporate affairs. There are few conditions mentioned under the ministry of corporate affairs which need to be fulfilled in order to close a company. In order to apply for company closure, affidavit and indemnity bonds needs to be given by both the directors, which must be stamped and notarized. So, for the closure of the company, a company must be approved by passing through board resolution. Ministry of Corporate affairs will examine the form for closure and upon satisfaction, closure gets approved within six to eight months. In order to liquidate the assets of the company. The company before closure must sell its assets in order to repay its liabilities and obligations. In order to wind up the company, it is required to have various reasons for the closure of the company such as unwillingness to continue with the operations, insolvency and so on. The outstanding balance after settlement to the creditors, gets circulated among the shareholders of the company after the liabilities are met. Compulsory winding up and Voluntarily winding up are the two ways by which a company can wind up. It is mandatory to close company when it is directed by the central government. Debt free, free from legal action against the company, Liquidation cost-effective, cancelled lease agreements and creditors benefit are benefits of closure of company.