I want to know if a private limited company has accumulated loss in balance sheet (in form of debt from one of the promoter, which was basically investment made by the promoter to meet the operating expense of the company as it was not making enough revenue to run itself), is it not possible to close the company at ROC?
I was told by CA that before closing the company, all debts should be paid off (even if the debt is from the promoter). Secondly, if the promoter writes of the debt, then the company becomes profitable (because the debt amout converts into income) and it has to pay tax accordingly!
Is it the case? Why a promoter should keep a loss making company? Does it make sense for ROC to keep the company active whereas there is no business activity (and no compliance as well).
What the legal experts say in this?
