Cost of Closing a Pvt Ltd company vs LLP,  ?

Want to Close down a new Company or LLP ? What are the Advantages and Disadvantages ?

Query in your mind ? What to do ?

So, You have thought of a Closing down a non working company due to any reason ? .OK

Advantage and Disadvantage

What  are the Advantages… ?

Closing of liabilities….hmmm…. anything else ?

What are the Disadvantages ? Did you think about it ? 

You must read this before you go ahead

First, Closing down the company ?

What if, the business idea does not work ?

or, What if you and your new friend / Partner cannot work together due to any reason ?

or, What will happen if you are in LOSSES ?  and there is no Hope of revival in near future ?

Answer to the first set of three questions is …

the Company can be given birth in a week / month… but takes many months/even a year to close down.

Source : https://www.compliancecalendar.in/close-llp

This site says.. every year Tens of Thousands of Companies and LLP are made but … this site and we ourselves know that average 70% don’t start business or don’t continue beyond the first 2 years …. So you are not alone…. 

and

source 2 : https://www.professionalutilities.com/private-limited-company-closure.php

Second, Big Risk of being DisQualified and removed from your own Main company ?

What if, the “non working”  Company / LLP is not able to file its Annual return ? due to any reason ?

Effect : You will stand Disqualified from all your other companies also .. including your running “existing businesses”.

 

Want evidence ? see this …

Source : https://cleartax.in/s/director-disqualification-removal-disqualification

• Where he/she is the director of a company that has either –
• a. Failed to file the annual returns for 3 years running
• b. Failed to pay interest on/repay the deposits for over a year
• c. Failed to pay any dividend that was declared for over a year
• d. Failed to redeem debentures or pay interest on debentures for over a year

In short, if your this new Company does not file its return due to mis-up between the partners… you become disqualified to remain director of your main business also.

 

Can you afford this Risk ?

What is the Probability.. that new business will not work ? ….

you might say it will work 100%… but market past shows that only 30% work and 70% do not work. So, better get somebody else in the family to become the Director till the company becomes of a significance and can be seen as a working company.

Can the procedure to close the LLP or Company be done with single party signatures ?

Of Course not. Both Parties , or say 100% of the Partners  , Directors, and shareholders must sign  the MOU for “closure”.

So, you are in a problem. Yes.

Sad part is that if both parties are not on talking terms,… and other party has nothing to lose…

Reasons ? maybe he has got a job somewhere, or he has left India for job outside India…. or ….. he does not want to pay for the LLP / Company closing expenses……he just wants to tease you …. 

in this case, you are saddled for life.

Daily rate penalty starts in all laws : GST, TDS, ROC, and Income Tax.

Better Solution : Sell the company to somebody else..

Get whatever you can… in case there are any assets.

if assets are NIL, or it is a zero asset company, then, Sell at NAV .

it could be Even at Rs 0.00 …

At least be free of the closure costs, ROC closure costs are significant… GST closure costs are also significant, Income tax closure efforts and costs are also significant

Contact us page click here

www.mlgassociates.org and www.mlgassociates.in

Proprietorship vs Partnership vs Pvt Ltd vs LLP, what to do. ? Advatanges vs Disadvantages, what to make for a Startup / New Venture ? Hope this comparison was well taken in positive light.