Closing a business is a tough decision, but a right one to make in case business isn’t working or you have any other reasons, to avoid paying unnecessary charges on compliance and audit. Our legal experts will help you complete any pending compliances, sell off stocks, pay the due amount to creditors, and give the remaining assets to shareholders or partners.
The company can be closed for a number of reasons. The prominent ones being-
Usually, directors are not personally liable for company debts. Therefore, if the company fails to pay off its debts and the creditors move court, the company assets are put to risk only and not the personal assets of the directors.
It’s important to wind up the company to protect directors and officials from any liabilities:
In case of voluntary closure, it usually takes 3-9 months for the company to liquidate. In compulsory liquidation, it can take up to 2 years to complete, since the date of application. The duration varies from company to company, depending on the complexity of the process involved.
As a company is winded up, a liquidator is appointed to look after the process independently. Liquidator assesses finances, sells assets to repay all pending liabilities. The remaining balance, if any, after repayment to the creditors, gets distributed among the shareholders of the company.