Closure of a private limited company

A private limited company has decided to lay off of all its employees because of lack of new business. The company still has funds in its account and now they are using those funds to revive the business. I have been told that it is not allowed to use these funds because the company has been closed. So far no formal closure has been announced and was also not the intention. Of course, the directors have agreed that the company has to rethink about its business model. The company assets are stll lying in the rented premises upon which rent has to be paid. In other words,the company still has funds and financial liabilities in the form of rent etc. Can company continue to use these funds? How is a company closure defined? As long as the shareholders of the company do not wish to close the business, it should continue to exists, in my understanding. 

Replies (1)

Closure of a unit of a company is different than closure of the company itself.  Closure of a unit does not mean that the company has been closed.  Closure of company is a lengthy process which requires approval of court.  For closing a unit, you have to comply with relevant  labour laws including Factories Act, Industrial Disputes Act etc.

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