Section 560

Save Share

This query is : Resolved

vasudevan (Querist)

09 February 2010 I have a query regarding s.560. A private company, incorporated one year back, has not opened its bank accounts (and no operations, nothing).

They want to proceed for winding up now (At the earliest possible).

If they opt s.560, they need to appoint auditor to prepare annual accounts etc, but they dont have bank account yet.

Can you please suggest some way?

CA Shishir

CA Shishir (Expert)

09 February 2010 How is having / not having a bank account affect appointment of auditor? You can appoint the auditor.
The other section under income tax like TDS, payments in cash etc. should be considered

vasudevan

vasudevan (Querist)

11 February 2010 Thanks Shishir...

But having bank account affect appointment of auditor because without money the Company cannot appoint any auditor. Also, the company cannot make any payment without having a bank account in place, hence TDS provisions cannot be applied.

Kindly confirm.

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)

23 July 2025 Your question concerns **Section 560 of the Companies Act, 1956** (now replaced by **Section 248 of the Companies Act, 2013**), regarding **winding up of a dormant private limited company** that has:

* No operations since incorporation (1 year back),
* No bank account,
* No transactions at all.

You are looking for the **earliest possible way to strike off the company** without incurring unnecessary compliance burden like auditor appointment, TDS, bank account, etc.

---

## ✅ **Clarification & Practical Solution**

Under **Section 560 of Companies Act, 1956** (now **Section 248 of Companies Act, 2013**), you can proceed for **striking off** a company if:

> The company **has not commenced business** or **has not been carrying on any business or operation** for the **last one year or more**.

---

### ✅ **Key Points** for Your Case:

* Company is **inactive** since incorporation.
* **No bank account**, hence **no financial transactions**.
* **No need to appoint auditor** just to get accounts prepared **if there are no accounts to audit**.

---

## 🔄 **Steps to Strike Off the Company (under Fast Track Exit - FTE mode)**

Since this was a **2010 query**, here's how it works **both under the old and the new regime**:

---

### 📝 **Under Section 560 (Companies Act, 1956):**

You could file **Form FTE** (Fast Track Exit) with:

1. **Affidavit** and **Indemnity Bond** from directors.
2. **Board resolution** for strike-off.
3. **Statement of Accounts** (nil, since no operations).
4. **Declaration of no assets or liabilities**.

✅ **Auditor appointment** may be skipped if:

* You **self-certify** (in prescribed format) that the company has **not commenced any operations** and has **no bank account or income**.
* Statement of accounts can be signed by a **director in Form FTE** (instead of auditor) in such dormant/no-op cases.

---

### 📝 **Under Section 248 (Companies Act, 2013):**

Now governed by **Form STK-2**, which requires:

1. **Board & shareholder resolution.**
2. **Indemnity Bond (Form STK-3) and Affidavit (STK-4).**
3. **Statement of Accounts** (certified by CA **only if** operations/assets exist — in your case, likely exempt).
4. **No dues certificate** (not required if nil activity).
5. **DSC of director & professional certification (CS/CA/CMA).**

---

## 🧾 **TDS, Bank A/c, and Other Tax Compliance**

* Since **no bank account exists**, no payments, no salary, and no purchases — **TDS and other provisions do not apply**.
* The company can **declare nil TDS compliance**, if asked.
* **ITR may be filed as “NIL”** for the incorporation year if required, stating that the company never commenced operations.

---

## ✅ **Conclusion**

* You **can proceed with strike-off under Section 560 (or Section 248 now)** even **without appointing an auditor**, provided there's **clear documentation** of:

* No bank account,
* No business,
* No income, assets, or liabilities.
* The **statement of accounts can be signed by a director** (not auditor) if company is **dormant/inactive**.

---

Let me know if you need templates for:

* Board Resolution for strike off
* Affidavit & Indemnity Bond
* Director's declaration of no operations/accounts

Or assistance with **Form STK-2 filing** process.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now