Non-performing businesses are like a white elephant, they need to feed without any profit. It is best to close such business at earliest after filing the pending return, Paying pending taxes and due diligence required. If you have any Partnership, Company or Limited Liability Partnership, which is not doing any business and you want to close it. Read the article to know the right process for it, So that latter the taxman should not come knocking your door for default.
What is a non-performing business?
There may be any reason but the following are some common types
- Companies/LLP/ Partnerships making continuous losses
- Companies/LLP/ Partnerships where no business transaction is taking place.
- Companies/LLP/ Partnerships where some or many directors or partners are not interested to continue it.
- Companies/LLP/ Partnerships where some or many directors or partners moved out of India and remaining are not interested to run it.
- Companies/LLP/ Partnerships where some or many directors want to close it due to internal disputes.
- Companies/LLP/ Partnerships has become defunct due to no business activity and filing of ROC returns.
If you feel your company/LLP/Partnership is falling under any of the following types, It is recommended to close it at earliest.
How to close the business?
It depends on business to business however following are the steps to close a business entity
Step1:- Finalize the accounts till the date of business closure:-Even if no business activity is done still nominal final accounts need to be prepared
Step 2:- Pay the pending taxes, penalty (if any) and file the pending returns:- if you have registered to Service Tax, VAT, Excise, Cess or any other certifications then pay the pending taxes and file the balance returns. If no business is done still a Zero return need to be filed along with late filing fees if any.
Step 3:- Surrender all registrations:- After filing pending returns and paying taxes. Surrender all registrations, so that the future liability doesn’t arise.
Step 4:- File closing papers to concerned authority:- Depending on whether it is a company, LLP or Partnership the papers for final closing should be filed.
Step 5:- Inform the stakeholders & public:- Although it may not be mandatory, However, it is advisable to inform all the interested parties like, Directors, Banks, Employees about the closure of a business. It will be preferable to give legal notice in local newspapers to inform the general public about the closure of a business. This will ensure that the business name may not be misused.
What will happen if the business is not closed properly?
If a business is not closed properly, the concerned departments will send the legal notice for payment of late filing penalty and these penalties are quite harsh. If the concerned person (Directors/Partners ) don’t reply to these notices then, a department can send police prosecutions notice, which even, may lead to imprisonment of Directors/Partners and even the property can be attached in some cases to recover the penalty
Why consult AKT Associates to close non-performing business?
Minimum Cost maximum convenience:- We very well understand that the current business is a dead investment for you, hence no one is willing to spend so much amount, Just to close a dead investment. Our expertise ensures that the business can be closed with minimum possible expenses. We also ensure you don’t need to spend days just to close a company which is not worth investing time.
Lowest Professional fee:– Closing a business is a cumbersome and time-consuming process, However, we understand it is not a place where you want to spend, Hence after discussion, we will offer you a minimum possible professional fee which is less by 70% as compared to any professional firms.
Post closure advisory:- As you might refer to step no 13 (Let’s make a fresh start). We will advise you on various fresh startup Idea, to start again.