Company Striking Off
Close Inactive Company Easily
An inactive or defunct company may be closed quickly by making an application in Form STK-2 to the ROC for striking off the company by the ROC. We assist companies in closing their company quickly and in 100% online mode.
Edited By: Sanjeev Kumar | in
Updated on: 10 May, 2025
Difference between Striking off and Winding Up
Under the Indian Companies Act, 2013, striking off and winding up are two different processes used to close a Company, which includes any company that is incorporated under the provisions of the Companies Act, 2013.
Striking off : Striking off is a simpler and quicker process that can be used when a company is inactive or dormant. This process involves removing the name of the company from the Register of Companies maintained by the Registrar of Companies (ROC). A company may apply for striking off voluntarily or the ROC may initiate the process if it has reasonable cause to believe that the company is not carrying on any business or operation. Striking off is generally a more cost-effective and faster process than winding up.
Winding up : Winding up, on the other hand, is a more complex and formal process that involves the liquidation of a company’s assets and the distribution of its liabilities among its creditors and shareholders. Winding up can be initiated voluntarily by the members or creditors of the company, or by an order of the National Company Law Tribunal (NCLT) in case of default or non-compliance with the provisions of the Companies Act. Winding up is a more formal and time-consuming process than striking off and involves more legal formalities.
Note: Striking off is a simpler and quicker process used when a company is inactive or dormant, while winding up is a more complex and formal process used to liquidate a company’s assets and liabilities.
Legal Provisions in the Companies Act, 2013 for Company Closure
Section 248 empowers the Registrar of Companies to strike off the name of a company in certain situations. These powers of the ROC can be invoked by the ROC itself or willingly by the company. The conditions for striking-off a Private Limited Company are mentioned in the table below. A company can be struck-off if any one of these conditions are satisfied.
| Section | Legal Provisions |
|---|---|
| 248 (1) a | When company failed to commence its business operation with one year of its incorporation |
| 248 (1) c | A company has not carried out any business operation for two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company u/s 455. |
| 248 (1) d | The subscribers to the MOA have not paid the capital amount which they were supposed to pay at the time of incorporation of a company within one hundred and eighty days from the date of its incorporation |
| 248 (1) e | The company is not carrying out any business activity, as revealed by the physical verification of the Registered Office of the company by the ROC |
Minimum Requirements to strike-off a Private Limited Company
| S.No | Requirements |
|---|---|
| 1. | Identify the relevant clause of section 248 of the Companies Act under which it is inactive or defunct |
| 2. | At least 75% of all shareholders must give their consent or pass a special resolution approving company’s closure |
| 3. | Make sure all government dues and other liabilities of the company are paid off |
| 4. | The current bank account of the company must be closed and the applicant must have the bank closure statement and letter |
| 5. | Make sure that the company does not have any assets and liabilities prior to STK-2 filing |
| 6. | The statement of Accounts stating Nil. assets and liabilities, attested by the CA have to be filed |
| 7. | No litigation or tax assessment must be pending in the name of the company |
| 8. | The DIN and DSC of all directors must be active |
Benefits of striking-off a Company
No Compliance
Even if a company is inactive, it has to fulfil all its compliances. The best way to get rid of this burden is to strike it off.
No Penalties
Failure to fulfil compliances invites hefty penalties which an inactive company cannot bear. So, to prevent such a situation, it is better to strike it off.
Better Utilisation of Resources
There is no use prolonging the continuity of a business that is continuously failing to perform. Instead, you can shut it off and utilise whatever little resources it has for a better purpose.
Option to restore operations
Striking-off is a temporary closure and you can restore a struck off company by appealing against the ROC’s order, within 3 years from the date on which the company was struck-off.
The list of Documents Required for Company Closure
| S.No | Document |
|---|---|
| 1. | Indemnity Bond signed by all the director (STK-3) |
| 2 | Affidavit signed by all the directors (STK-4) |
| 3 | Copies of consent by at least 75% shareholders, or original copy of special resolution (MGT-14) passed by the shareholders and certified by all the directors |
| 4. | Board Resolution authorising director/MD/Manager/ Secretary to sign STK using DSC |
| 5. | Statement of Accounts (STK-8) |
| 6. | Bank closure statement & bank closure letter |
* Note The Indemnity Bond and Affidavit declaration by the directors must be drafted on a non-Judicial stamp paper of appropriate value. Rs.100 stamp paper is applicable for indemnity bond and Rs.50-100 is applicable on affidavits. These must be duly stamped by a public notary. The stamp duty and notary charges shall vary from state to state.
How can Setindiabiz Help?
Voluntarily striking off your company is the best way to go when your company has been inactive or defunct for a very long period of time. This way you can save your company from hefty operational costs when it is not generating any revenue, and restore it whenever you are optimistic about its financial health. Sounds quite convenient, right?
Well, no doubt, the idea does sound convenient, but when it comes to executing it, the process has several legal intricacies that make it unbelievably complicated for a layman. So, if you are willing to voluntarily strike-off your company, we recommend that you seek professional help, and who better for the purpose than Setindiabiz!
At Setindiabiz, we provide complete services of striking-off a Private Limited Company including,
- Checking its eligibility for being struck-off u/s 248 of the Companies Act
- Obtaining & drafting all the necessary documents
- Filing application form STK 2 to the ROC
- Tracking status of the application, till the company is finally struck-off by the ROC
We have a robust team of extremely qualified, skilled, and experienced legal experts who offer their expert guidance and assistance to you at every step of the procedure. So what are you waiting for? Contact our Startup advisors immediately, and get your company struck off in no time, and at minimal costs!
Frequently Asked Questions
A Private Limited Company can be closed in 3 different ways.
- Striking off the Company by ROC by declaring it as Defunct under section 248 of the Companies Act
- Voluntary winding-up of company by the NCLT with the consent of at least 75% of shareholders
- Forceful winding-up of company by the NCLT on the appeal of the creditors, ROC, Central Government
Striking off a company simply implies that the Registrar of Companies has removed its name from the Register it maintains. This option is applicable only if the company has been defunct or inactive for a prescribed period and has nil. assets and liabilities throughout its duration of inactivity. If any liabilities still arise after striking off, the designated partners will be liable to pay them off. A company can still be restored after it has been struck-off.
On the other hand, winding up is the complete closure of an active company by the NCLT. Here, the assets and liabilities of the company are settled by an insolvency professional, and once the company is wound up, it cannot be further restored by any means. Moreover, no liabilities or amounts are due after the company is wound up.
A company’s Financial statements and annual returns in forms AOC-4 and MGT-7 need to be filed for the financial years during which the company was active. For example, if the company was active until 25th October 2020, then the FY 2020-21 annual return must be filed before the company Striking Off application is filed.
After a company is struck-off:
- It’s name is removed from the Register of companies maintained by the ROC
- It shall cease all its business operations immediately
- Its Certificate of Incorporation shall be considered as cancelled for all purposes other than for identifying and paying-off the companies dues and liabilities arising after it has been struck-off
After filing STK-2, the registrar may take two weeks time in accepting the application and approving the application. Once approved, intimation is sent to the commissioner of income tax, for raising objections, if any. The ROC further publishes the names of companies who have applied for closure on their website for public viewing and inviting opposition against the closure of the company from the public at large. If the ROC does not receive any objections from either the Income Tax Department or the general public, he shall strike-off the company. The entire process may take around 2-3 months of time.
To restore a struck-off company, an appeal against the order of ROC has to be made in the NCLT within 3 years from the date on which the notice for strike-off was published in the official gazette by the ROC.
The Government fee for STK-2 application is Rs.10,000.