Why Shut Down your Startup when there are Options for Legal Existence

Entrepreneurs remain Entrepreneurs! Sometimes, what surprises me the most is, Why Shut Down your Startup when there are Options for Legal Existence? Majority of entrepreneurs lack a proper legal advisory in the team that could help the firm to take right decisions predicting things long before. In this article, I will be focusing on ways a startup could sustain to be active smartly in Indian startup ecosystem.

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 the 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.  


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Start-up process entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly.