Company Closure and Strike-off

Overview

A company stays on the Registrar's records, with filing duties and penalties, until it is formally closed. Stopping business is not the same as closing the company. India offers three main ways out: voluntary strike-off under Section 248(2) of the Companies Act, 2013 using Form STK-2 (for companies that are not carrying on business), voluntary liquidation for a solvent company that wants an orderly wind-up under the Insolvency and Bankruptcy Code, and compulsory winding up by the National Company Law Tribunal (NCLT). A company with no operations and no liabilities usually fits strike-off.

Who needs it

• A company that never started business within a year of incorporation.
• A company that has stopped business for at least two years and wants to exit cleanly.
• Founders who want to stop annual filings, DIN and director compliance for an unused company.
• Owners of a solvent but wound-down business that needs liquidation rather than strike-off.

What Zenith does

We listen to why the company is closing, check its filing and tax position, and recommend which route fits. Your relationship manager shares a checklist specific to your case, helps clear overdue forms, prepares the board and members' resolutions, indemnity bonds, affidavits and the professionally certified statement of accounts, and files through appropriately authorised professionals. Anything involving the Tribunal or a liquidator is handled only through an authorised insolvency professional or advocate. Timelines depend on completeness, complexity and authority processing.

Eligibility and key rules

For voluntary strike-off (STK-2)

• The company has not commenced business within one year of incorporation, or has not carried on business for at least two years.
• All liabilities are discharged, bank accounts closed, assets disposed of and no litigation pending that affects closure.
• Overdue AOC-4 and MGT-7 are filed up to the year in which business stopped.
• It must not have changed its name, shifted its registered office to another state, applied to the NCLT for a compromise or been wound up in the previous three months.
• Not eligible: listed companies, Section 8 companies, companies under inspection, investigation or prosecution, companies holding public deposits and vanishing companies.
• Companies regulated by RBI, SEBI, IRDAI or similar need a no-objection from the regulator.

Other routes

• Voluntary liquidation: for solvent companies; needs a directors' declaration of solvency, a special resolution and an insolvency professional as liquidator.
• Compulsory winding up: ordered by the NCLT on a petition, for example for inability to pay debts or non-filing of financial statements for five consecutive years.

Documents required

• Board resolution approving strike-off, and special resolution or consent of members holding at least 75% of paid-up capital.
• Statement of accounts certified by an authorised professional, not older than 30 days (Form STK-8).
• Indemnity bond from every director (Form STK-3).
• Affidavit from every director (Form STK-4).
• Statement of pending litigation, if any.
• Regulator no-objection, where applicable.
• Evidence of bank account closure and cancelled registrations (GST, PF, ESI, licences).
• Certificate of incorporation, MOA and AOA, director KYC.

Process and timeline

1. Review eligibility and filing status; clear overdue ROC forms.
2. Settle liabilities, employee dues and taxes; cancel GST and other registrations; close bank accounts.
3. Board meeting and members' approval.
4. Prepare STK-3, STK-4 and STK-8 and attach supporting papers.
5. File STK-2 on the MCA portal with fee.
6. The Registrar scrutinises, publishes notices inviting objections and informs regulators such as the Income Tax Department.
7. If no valid objection arises and the Registrar is satisfied, the name is struck off and the company stands dissolved.

Timelines depend on completeness, complexity and authority processing; liquidation and Tribunal routes take considerably longer.

Government fees, penalties and due dates

• STK-2 government fee: ₹10,000 in the public source read.
• Overdue annual forms must be filed with additional fees before STK-2 can be filed.
• Directors remain liable for obligations incurred before dissolution, and a struck-off company can be revived by the Tribunal if needed.
• Liquidation and Tribunal routes carry liquidator, advocate and filing costs, which vary with complexity.

Amounts and dates above reflect public sources read in October 2026 and change with notifications, so Zenith confirms the current figures in your quotation.

Common mistakes

• Assuming that ceasing business closes the company.
• Filing STK-2 while AOC-4 and MGT-7 are overdue.
• Leaving GST, TDS, PF or ESI open or filing no final returns.
• Keeping an operating bank account.
• Applying after a recent name change or registered office shift.
• Using strike-off for a company that still has creditors, where liquidation is the safer route.

FAQs