Close pvt ltd company - no business done since incorporation

Pvt ltd 1496 views 10 replies

Simran Vora

Manager

46 Points Joined July 2014

Mr. X is citizen of London, UK. He has a company there with the name ABC. Only time he came to India was for paperwork when the company had to be formed.

He and myself started a Pvt Ltd company in India with the name ABC India Pvt Ltd some 5 years back with paidup capital of 1,00,000 INR. We also have a current account in India.

However the company never did any business or any kind of business related transactions in these 5 years. Neither did we do any Audit nor filed tax returns in all these years.

We want to close the company.

1. What would be the fastest and hasslefree option to close the company?

2. Recently while doing some research on the net, I read on the net that there could be monetary penalties and/or criminal proceedings with jail term against directors of the company incase of non-filing of tax returns? Could it also apply to us even though we never did any kind of business? What are our options to avoid this if any??

3. How much time and money will be required to close the company? (approximately)

Your inputs greatly appreciated.

Thanks for help.

Simran.

Replies (10)

vignesh raghuraman

student

75 Points Joined July 2015

I know its akward but your profile pic is pretty sporty

ACS Parul Rawat

Entrepreneur | Corporate Law Advisor | L

218 Points Joined September 2015

Kindly check the status of your Company on MCA it must have striked off till now, and if its still existing u may go for Fast Track Exit.

Simran Vora

Manager

46 Points Joined July 2014

Hi Parul,

Thanks for reply. The status on MCA portal says "Approved"

I talked to a CA, he says the company is defunct and we should ignore the reminder email notifications we are receiving to file the taxes.

Will there be any monetary penalties if we don't file taxes? Any criminal proceedings?

Thanks for help.

JOJY THOMAS

CHARTERED ACCOUNTANT

305 Points Joined May 2009

Not doing any business would mean that your company doesnot have a taxable income (income includes loss) and due that you are not required to pay taxes and I feel that FILING NIL Tax return is not required as no tax evasion is involved

ACS Parul Rawat

Entrepreneur | Corporate Law Advisor | L

218 Points Joined September 2015

@ Simran I think even if the Company is not carrying any business still it has to file NIL Return, coz if we see the practical side hw will the Income tax Authority knw that ur Co. is not carrying any business untill n unless u will file NIL return, it will keep sending mails and messages till the Co. goes out of existence. I agree that there mst be no tax evasion bt still return must be filed.

CA CS Lokesh Singhal

Company Secretary and Deputy Manager Fin

251 Points Joined August 2009

for income tax returen you can file only upto 2 years post comppletion of the FY, if you have not filled any return then just wait for the notice to be issued by AO under sec 142(1) for filling of return and at that time you may submit your nil return.

CA CS Lokesh Singhal

Company Secretary and Deputy Manager Fin

251 Points Joined August 2009

simram there is nothing to worry and just ignore the mails you are receiving from MCA.

Simran Vora

Manager

46 Points Joined July 2014

Thank you Praul, Jojy, Lokesh for pitching in.

I guess I will ignore their email notices and keep my fingers crossed and that one day the co somehow closes on it's own (not sure how and if it's possibe? :p)

CS Subbarao

40 Points Joined March 2015

Dear Simran Your company will not be closed automatically unless you follow procedure under Fast Track Exit as per Companies Act. My advise is instead ignoring mails from Income Tax Department and MCA, close the company through FTE. Thanks & Kind Regards K.V.Subba Rao

CS MOHIT SALUJA

PRACTICING CS Jalandhar 9914558709

5155 Points Joined April 2010

Best solution is just to file the FTE Form with the concerned ROC. Roc then send the notice to directors and Income Tax Department regarding striking off the name of company and ask IT Deptt. for any objection, if they do not want the company to be closed. and in 99% chances, IT Deptt. does not reply and the company is being closed from ROC End. Hence, incurr some expenses, and strike off the name of the company and be relaxed only then.