/Liaison office Closing : Closing up non-compliance’s for fast closer

Closing a company should be as simple as possible so that you can move on quickly. In India, it has become less complicated in the last few years, but you still must know what you are doing.

COMPLIANCES NEEDS TO BE DONE BEFORE INITIATING CLOSURE OF Liaison Office

Before initiating the process for closure of the Liaison Office, the company has to comply with the following in advance:

1. Filings in regards with the Registrar of Companies (ROC)

• Filing of the annual financial statement of Indian LO needs in e-form FC-3 from incorporation till the date of closure
• Filing of Annual Return of Indian Liaison Office in e-form FC-4 from incorporation till the date of closure

2. Documents and Compliances required with the AD Bank / The Reserve Bank of India (RBI)

• Verification of the extension letter of the LO to check the validity period. On the expiry of the period of extension, an application is made with the AD Bank for renewal of extension.
• Verification of the Annual Activity Certificate (AAC) and financial statement as filed to the AD Bank from incorporation till the last financial year immediately preceding the date of closure.

3. Compliances in regards with the Director-General of International Taxation (DGIT) and Director General of Police (DGP)

• Verification of the Annual Activity Certificate (AAC) and financial statement as filed to the Director-General of International Taxation (DGIT) from incorporation till the last financial year immediately preceding the date of closure.
• Verification of the Annual filing of Form 49C (various details pertaining to LO) to the Director-General of International Taxation (DGIT) from incorporation till the last financial year immediately preceding the date of closure.
• Verification of the Annual Activity Certificate (AAC) and Annual Report as filed to the Director-General of Police (DGP) till the last financial year immediately preceding the date of closure.

Back in 2016, a European Company in Mumbai decided to close its Liaison Office (LO). The company got stuck because there were a lot of non-compliances to clear up with the ROC and RBI. They had help from a certified CA, but the paperwork wasn’t moving.

In 2019 the company approached Maier Vidorno Altios for help. We resolved the non-compliances step by step. The RBI closed the Liaison Office (LO) last month, and the parent company has bank balance back in its accounts.