How to Close
A Private Limited Company that is dormant or wishes to cease operations can apply for strike-off under Section 248 of the Companies Act 2013, using Form STK-2 (Fast Track Exit). This is faster and cheaper than voluntary winding up under the NCLT. The RoC removes the company's name from the register once satisfied that all dues are cleared and no liabilities remain.
Before you start
- Company has not commenced business, or has been inactive for at least 2 consecutive financial years
- No pending litigation, prosecution, or investigation against the company
- All statutory returns filed up to date (Form AOC-4, MGT-7)
- All bank accounts of the company closed
- No assets or liabilities remaining (confirmed by affidavit)
Step-by-step
Pass Board and Shareholder Resolutions
Hold a Board Meeting to approve the closure and authorise filing of STK-2. Then convene an Extraordinary General Meeting (EGM) or obtain written consent from at least 75% of shareholders (by share value) approving the strike-off application.
Settle All Liabilities
Clear all outstanding liabilities — statutory dues (GST, income tax, EPF, ESI), vendor payables, employee dues, and bank loans. Obtain NOCs from creditors if significant amounts are involved. Close all company bank accounts and obtain bank closure certificates.
File Pending Statutory Returns
File all overdue annual returns (MGT-7/MGT-7A) and financial statements (AOC-4) up to the last financial year before making the STK-2 application. The MCA system verifies pending filings and will reject STK-2 if any returns are outstanding.
Prepare and File Form STK-2
File Form STK-2 on the MCA portal, signed by a majority of directors using their DSCs. Attach: indemnity bond (STK-3) signed by all directors, a statement of accounts (prepared by a CA not older than 30 days), affidavit from directors (STK-4), and the Board/EGM resolution.
Public Notice by RoC
The RoC publishes a public notice in the Official Gazette and on the MCA website inviting objections to the proposed strike-off. Any objector (creditor, regulatory body, etc.) has 30 days to file objections.
Strike-Off and Final Notice
If no objections are received (or are resolved), the RoC issues the final strike-off notice in the Official Gazette. The company's name is removed from the register of companies and the CIN becomes invalid.
Common mistakes to avoid
- Applying for STK-2 with outstanding GST/IT dues — tax authorities routinely check and object to strike-off applications of companies with unpaid taxes.
- Not closing the bank account before filing — the statement of accounts must show a nil balance; an open account means assets exist, invalidating the indemnity bond.
- Filing STK-2 while any prosecution or investigation is pending — the MCA will reject it and the applicant directors may face additional scrutiny.
- Reinstating a company after strike-off without proper grounds — the court-based restoration process (Section 252) is expensive and slow; it is far easier to prevent a mistaken strike-off.
Frequently asked questions
What is the difference between strike-off and winding up?
Strike-off (fast track exit via STK-2) is an administrative process for companies with no assets/liabilities. Winding up involves liquidating assets, paying creditors, and distributing surplus — it goes through the NCLT and is much more complex and expensive.
Can a company be restored after being struck off?
Yes, within 20 years, any member, creditor, or the company itself can apply to the NCLT for restoration if the strike-off was wrongful or if there are legitimate grounds. Restoration is granted at the court's discretion.
What happens to a struck-off company's GST registration?
On company strike-off, the GST registration must be separately cancelled by filing Form GST REG-16 on the GST portal. GST closure should be done before or concurrent with the STK-2 filing.
How long does the STK-2 process take?
From filing STK-2 to final gazette notification, the typical timeline is 3–6 months. This includes the 30-day objection window and the RoC's internal processing time.
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