The cheapest way to close a company that never worked is to close it. The most expensive is to walk away and let it sit there, because an abandoned company does not quietly evaporate — it accrues ₹100 a day per missed form, disqualifies its directors after three years, and eventually gets struck off by the Registrar in a way that sits on the founders' record rather than on nobody's.
Voluntary striking off under Section 248 of the Companies Act, 2013, filed in Form STK-2 with a fee of Rs. 10,000, removes a defunct company from the register and dissolves it — but only once every liability is extinguished and every pending annual filing is complete.
The bottom line
Who can use it: a company that never commenced business, or has not carried on business for the two immediately preceding financial years and has not applied for dormant status.
What it costs and how long: Rs. 10,000 plus professional fees, and roughly three to four months, most of it the statutory public notice period you cannot compress.
What it does not do: erase liability. Every director's and member's liability continues as if the company had never been dissolved.
What striking off means
Removal of the company's name from the Register of Companies. Once struck off, the company is dissolved and stops existing as a legal person.
It is the simplest and cheapest exit for a small company that either never traded or has stopped, which is exactly the situation most abandoned companies are in.
Who is eligible
A company can apply if it has not commenced any business since incorporation, or has not carried on business for the two immediately preceding financial years and has not applied for dormant status.
Before applying it must extinguish all liabilities: close bank accounts, settle creditors, dispose of assets. All pending annual filings — AOC-4 and MGT-7 — must be completed up to the date business ceased. You cannot use strike-off to escape the filings you skipped.
Who cannot
The route is closed to listed companies, companies under inspection or investigation, companies with pending prosecutions, and companies that changed their name or shifted their registered office in the previous three months. Section 8 companies are excluded.
The process
- Board meeting. Pass a resolution authorising the application and authorising a director to file STK-2.
- Settle liabilities. Clear all dues, close the bank accounts, and obtain a bank closure certificate.
- Shareholder approval. Consent of at least 75% of members by paid-up share capital, usually through a special resolution.
- Prepare the documents. A statement of accounts in Form STK-8 certified by a chartered accountant and not older than 30 days from the date of application, plus affidavits and indemnity bonds from every director in Forms STK-4 and STK-3.
- Obtain the NOCs. A no-objection certificate from the Income Tax Department, and cancellation of GST registration or proof of it.
- File STK-2 on MCA V3. Select the form, enter the CIN, attach everything and pay Rs. 10,000. Since 2024 STK-2 is filed only on V3 and processed by C-PACE, the Centre for Processing Accelerated Corporate Exit, which brought processing down to under two months.
- Public notice. C-PACE or the Registrar publishes a notice in STK-7 inviting objections. With none received in the notice period, the name is struck off and the company stands dissolved.
The document checklist
- Indemnity bond from all directors (STK-3)
- CA-certified statement of accounts (STK-8), not older than 30 days
- Affidavit from each director (STK-4)
- Special resolution or written consent of 75% of members
- Bank closure certificate, or latest statement showing a nil balance
- Income Tax NOC and proof of GST cancellation, where applicable
The 30-day limit on the statement of accounts is the one that catches people. Collect it last, not first, or you will be paying for a second one.
Strike off or dormant status
If the company has no future, strike it off. If you may want it later — to hold an asset, protect a brand name, or restart the business — apply for dormant status under Section 455 instead. A dormant company stays on the register with minimal compliance and can be reactivated when business resumes.
Choosing dormancy costs a little each year. Reviving a struck-off company costs a great deal more.
What happens if you just stop filing
The Registrar can strike off a defunct company on its own under Section 248(1), and some founders quietly rely on that.
The problem is that you control none of it. Penalties accrue at ₹100 per day per form in the meantime, directors face disqualification under Section 164, and they may be barred from incorporating new companies. A compulsory strike-off also reads far worse on a director's record than a voluntary one. Doing nothing is almost always the most expensive option available.
Reviving a struck-off company
An aggrieved stakeholder can apply to the National Company Law Tribunal for restoration within three years, and in certain cases up to twenty years for particular applicants. The Tribunal can order the name restored as if it had never been struck off.
It is a contested proceeding with lawyers on both sides, which is why dormant status is usually the better decision made two years earlier.
Strike off is not winding up
Striking off suits small defunct companies with no real assets, liabilities or disputes.
Winding up, meaning liquidation, is the tribunal-supervised process for a company with significant assets to distribute, creditors to settle, or insolvency to resolve. It involves a liquidator, public advertisements and detailed accounting. If your company has genuine assets and liabilities to unwind, strike-off is the wrong route and using it will not make the obligations disappear.
Tax and PAN housekeeping
Closing at the Registrar settles nothing with the other authorities. File the company's final income tax return, cancel the GST registration properly including the final return GSTR-10, and surrender the PAN and TAN once all dues are clear.
Leave these open and notices arrive years later, addressed to former directors of a company that no longer exists.
Common mistakes
- Abandoning the company instead of closing it, and paying more in penalties than the closure would have cost.
- Filing STK-2 with annual filings still outstanding.
- Getting the STK-8 statement of accounts certified early and finding it is older than 30 days at filing.
- Closing the bank account before the last dues are settled, or leaving it open and having no closure certificate.
- Choosing strike-off when the company has real assets and liabilities, which needs a winding up.
- Forgetting GSTR-10 and the PAN surrender, so the correspondence outlives the company.
Frequently asked questions
How long does a voluntary strike-off take? Around three to four months from board resolution to dissolution, most of it the mandatory public notice period.
What does it cost? A government fee of Rs. 10,000 for STK-2, plus professional fees for the CA-certified accounts and the filings.
Does striking off wipe out director liability? No. Liability of directors and members continues as if the company had not been dissolved.
Can a struck-off company be brought back? Yes, by application to the NCLT within three years, and up to twenty years for certain applicants. It is expensive and contested.
Should I choose dormant status instead? If there is any chance you will use the company again, yes. Section 455 dormancy keeps it alive with minimal compliance.
Do I need to complete pending filings first? Yes. All annual filings up to the date business ceased must be done before STK-2 can be filed.