Every entrepreneur wants their business to flourish more & generate profits, but there are multiple scenarios wherein an entrepreneur has to take the decision of closing down his business. In legal terms, we call it as winding up of a Private Limited Company. It is the last stage of a Private Limited Company in which its presence for the past several years is dissolved and all its assets are used to pay off the creditors, shareholders, and other liabilities.
Importance of winding up of a Private Limited Company
- Avoid compliance
- Avoid any penalties or fines
- Low cost as compared to maintaining compliance for a dormant company
If your company is not operating properly or faces continuous business losses, it is advisable to close such a company and look for some alternate business solutions to come up with. A private limited company needs to be closed or windup when there are no activities since incorporation or the Director/s of the company is not willing to continue operations.