A private limited company is an artificial judicial person and requires various compliances like appointment of Auditor, regular filing of income tax return, annual return filing and more. Failing to maintain compliance for a Company could result in fines and/or disqualification of the Directors from incorporating another Company. Therefore, if a private limited company has become inactive and there are no transactions in the company, then it is best to wind up the Company.
Under section 248(1)(c), a company can be closed even when the company started its business but has been inoperative for the past two financial years.
There is no assets or liabilities in the company. All bank A/c must be closed, and the financial statements must be certified by a Chartered Accountant.
Under section 248(1)(a), only that company can be closed which could not commence its business operations within one year of its incorporation. In other words, there is absolutely no transaction in the company
There should not be any litigation or tax assessment pending for the company with the state government or central government or their agencies.