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How to Close a Private Limited Company in Chennai: A Step-by-Step Guide

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Renuka M
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2 min read

Closing a Private Limited Company (Pvt Ltd) in Chennai requires following a structured legal process. The process depends on the company’s financial status, liabilities, and compliance history. This guide outlines the necessary steps to ensure a smooth and legally compliant closure.

Methods of Closing a Private Limited Company

There are two primary ways to close a private limited company in Chennai:

  1. Voluntary Strike Off – If the company has no liabilities and has been inactive for a certain period.

  2. Compulsory Winding Up – Ordered by the tribunal due to financial distress or regulatory non-compliance.

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

Step 1: Hold a Board Meeting

  • Pass a board resolution approving the company’s closure.

  • Authorise a director to initiate the closure process.

Step 2: Clear All Liabilities

  • Settle outstanding debts, loans, and statutory dues (GST, Income Tax, etc.).

  • Obtain a No Objection Certificate (NOC) from creditors (if applicable).

Step 3: Obtain Shareholders’ Approval

  • Convene an Extraordinary General Meeting (EGM).

  • Pass a special resolution (at least 75% shareholder approval required).

Step 4: File Application for Closure

For Voluntary Strike Off (Fast Track Exit)

  • File Form STK-2 with the Registrar of Companies (ROC), along with:

    • Board Resolution

    • Special resolution copy

    • Indemnity bond and affidavit from directors

    • Statement of accounts (not older than 30 days)

    • Company’s PAN card and certificate of incorporation

For Compulsory Winding Up

  • File a winding-up petition before the National Company Law Tribunal (NCLT).

  • Submit financial documents and liquidation details.

  • Appoint a liquidator to manage asset distribution.

Step 5: Public Notice by ROC

  • Once the application is submitted, the ROC issues a public notice for objections.

  • If no objections arise, the ROC proceeds with a company strike-off.

Step 6: Company Closure Confirmation

  • The ROC removes the company’s name from the register.

  • A formal dissolution certificate is issued as proof of closure.

Key Considerations for Company Closure

  • The company must have zero liabilities at the time of closure.

  • Any pending legal disputes can delay the process.

  • Directors and shareholders should maintain proper documentation for future reference.

Timeframe and Costs

  • Voluntary Strike Off: 3-6 months

  • Compulsory Winding Up: 12-24 months

  • Cost Estimate: ₹10,000 – ₹50,000 (depending on professional fees and legal formalities)

Conclusion

Closing a Private Limited Company in Chennai requires careful planning and adherence to legal procedures. Consulting a professional (CA or CS) can simplify the process and prevent unnecessary delays. To avoid legal complications in the future, ensure all statutory compliances are met before initiating the closure.

Closure of Private Limited Company in Chennai