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What if someone doesn't close a private limited company in India and leave it non-functional? What are the pros and cons? Answer Request - Hire CA : Knowledgebase
Cons-Fine a lot of them, difficult to find a buyer
Pros- You will be saving closure costs.
But, in case I could show you some options, probably you might change your mind.
You have three options:
Plan A: Work on a similar business idea, with modifications in MOA
You can alter Memorandum of Association through Special Resolution & Confirmation by Central Government (Section 13)
Note: In case of failure to register within the time prescribed then all such alterations made and the orders of Central Government will become void.
Plan B: Let the firm be without any operations and file with ROC of Nil returns annually.
As per Companies Act – 2013 – Section 92(1) every company is required to file annual return. For Companies that have had no operations nor have any transactions to file Nil Returns in annual returns with ROC.
Plan C: Apply for dormant status of the Company
Section 455 of the Companies Act 2013 defines Dormant Company as a company is formed and registered under this Act for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such a company or an inactive company may make an application to the Registrar in such manner as may be prescribed for obtaining the status of a dormant company, without any significant accounting transactions i.e. an Inactive company (no business or operation), or has not made any significant accounting transaction during the last two financial years, or has not filed financial statements and annual returns during the last two financial years.