How to Get Company Closure / Strike Off in India
Closing a company in India is not merely about stopping operations; it requires strict adherence to the Companies Act, 2013 and Ministry of Corporate Affairs (MCA) regulations governing voluntary strike-off under Section 248(2). Whether you are shutting down an OPC, a private limited entity, or an LLP due to insolvency, a dormant subsidiary, or simple business completion, failing to follow the correct strike-off procedure can lead to director disqualification, continued statutory liability, and personal exposure for outstanding debts even after the business itself has stopped trading. This comprehensive guide outlines the exact steps required to deregister your company from 2026 onwards, from clearing statutory dues like GST, TDS, and Income Tax, to filing Form STK-2 (the current consolidated strike-off application) on the MCA V3 portal, to obtaining the final certificate of dissolution. Since 2023, voluntary strike-off applications are centrally processed by the Centre for Processing Accelerated Corporate Exit (C-PACE) rather than the jurisdictional Registrar of Companies, which has meaningfully cut processing time. This guide also flags the most common reasons C-PACE raises deficiency notices or delays applications, so you can avoid a second filing cycle. Our team at PNPC Global manages the paperwork, director consents, and departmental liaison end to end, so directors are not left chasing multiple authorities during closure.
Before you start
- Company or OPC has been inactive with no business operations for the applicable period, or the board has resolved to cease operations.
- Company has no outstanding liabilities to creditors, employees, or statutory authorities as of the date of application.
- All GST, TDS, and Income Tax returns are filed up to date, with GST registration formally cancelled where applicable.
- The company holds no assets on its balance sheet other than cash equivalent to liabilities, or assets have been realised and distributed.
- A board resolution and, where required, a special resolution or 75% shareholder consent authorising the strike-off has been passed.
- Bank accounts in the company's name have been closed and closure confirmation obtained from the bank.
- Digital Signature Certificates (DSC) of each director are active, since every director must individually digitally sign the affidavit and indemnity bond for e-filing on the MCA portal.
- The company is not under any pending inspection, inquiry, investigation, prosecution, or litigation before any court or tribunal.
Step-by-step
Step 1: Confirm Eligibility and Hold Board Approval
Before initiating closure, confirm the company meets the eligibility conditions under Section 248 of the Companies Act, 2013 — principally that it has not carried on any business or operation for the two immediately preceding financial years (Section 248(1)(c)), or has failed to commence business within one year of incorporation (Section 248(1)(a)), and has no pending liabilities, litigation, or regulatory action.
Convene a board meeting to pass a resolution approving the strike-off and authorising a director to make the application. Where the company's Articles or the Act require it, also obtain shareholder approval by special resolution or written consent of members holding at least 75% of paid-up share capital.
Step 2: Clear All Statutory Dues
Ensure all outstanding liabilities under GST and Income Tax are settled and returns filed up to the closure date. File GST cancellation (Form GST REG-16) if the company is GST-registered, and close out any pending filings or dues with EPFO and ESIC if the company had employees.
- Reconcile TDS returns and issue final Form 16/16A to any deductees
- Settle statutory bonus, gratuity, or PF dues owed to former employees
- Obtain a no-dues confirmation from bankers where the account has been closed
Step 3: Prepare the Statement of Accounts
Prepare a Statement of Accounts (in Form STK-8) reflecting the company's assets and liabilities, made up to a date not more than thirty days before the date of application. This statement must be certified by a practising Chartered Accountant.
If the company has no assets or liabilities, the statement should reflect a nil position; any residual bank balance should be distributed to shareholders or transferred as prescribed before filing.
Step 4: File Form STK-2 for Strike Off
File the consolidated strike-off application in Form STK-2 on the MCA portal, along with the Statement of Accounts, an affidavit from every director (Form STK-4), an indemnity bond (Form STK-3, on stamp paper as per the state's Stamp Act), a board/special resolution copy, and a statement of pending litigation, if any.
All directors must digitally sign the affidavits and indemnity bonds, and the application must be certified by a practising CA, Company Secretary, or Cost Accountant.
Step 5: Respond to C-PACE Queries or Deficiency Notices
Since 2023, STK-2 applications are scrutinised centrally by the Centre for Processing Accelerated Corporate Exit (C-PACE) rather than the company's jurisdictional Registrar, though the Registrar of Companies retains functional oversight of the underlying record. C-PACE may raise a deficiency notice — commonly for mismatched financials, unfiled annual returns, or missing consents. Respond within the timeframe given, typically with supplementary documents or a resubmitted form.
Unresolved deficiencies are the single largest cause of delay in strike-off applications, so track the application status on the MCA portal regularly during this stage.
Step 6: Public Notice and Objection Window
Once C-PACE is satisfied, it publishes a public notice (Form STK-6) on the MCA website and, for larger companies, in the Official Gazette, inviting objections from creditors, regulators, and other stakeholders within thirty days.
This notice is the statutory safeguard that protects third-party interests, so it cannot be waived or expedited; any objection received during this window pauses the process until resolved.
Step 7: Final Order and Dissolution
If no objection is received within the notice period, C-PACE, acting in its functional capacity as Registrar for this purpose, passes an order striking the company's name off the register and publishes a final notice of dissolution (Form STK-7) in the Official Gazette. The company legally ceases to exist from the date of this notice.
Directors should retain the Gazette notification and the STK-7 as permanent proof of dissolution.
Step 8: Cancel PAN, TAN, and Close Statutory Records
Once strike-off is confirmed, surrender the company's Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) to the Income Tax Department, close any remaining professional tax or state-level registrations, and dispose of or archive the company seal and statutory registers.
- Retain accounting records and returns for the statutory retention period even after dissolution
- Inform any remaining vendors or licensors that the entity has been formally dissolved
Step 9: Update Director Records and DIN Status
Verify that the closure is reflected against each director's DIN (Director Identification Number) on the MCA portal, since an incomplete or improperly closed strike-off can flag directors in future filings for other companies they hold directorships in.
Directors intending to incorporate a new entity soon after should confirm there is no residual disqualification flag before applying.
Step 10: Retain the Closure Certificate for Records
Download and securely store the STK-7 dissolution notice, the final STK-2 acknowledgment, and all supporting affidavits. These documents may be required for future reference — for instance, if a bank, lender, or tax authority later queries the entity's status, or for a director's personal compliance record.
Common mistakes to avoid
- Applying for strike-off while GST or Income Tax returns remain unfiled, which triggers an automatic deficiency notice.
- Not closing the company's bank account before filing, leaving an active account that contradicts the nil-liability declaration.
- Skipping shareholder consent where a special resolution is legally required, invalidating the board's authorisation.
- Understating or omitting pending litigation in the STK-2 disclosures, which can lead to rejection or later legal exposure for directors.
- Using an outdated or improperly notarised indemnity bond format that does not match the state's current stamp duty requirements.
- Assuming strike-off automatically closes GST, PF, ESIC, or professional tax registrations — each must be cancelled separately beforehand.
- Missing the thirty-day response window on a ROC deficiency notice, which can cause the application to be treated as withdrawn.
- Distributing residual company assets to shareholders without following the prescribed order of settling creditors first.
Frequently asked questions
How long does a company closure take in 2026?
Since voluntary strike-off applications moved to centralised processing under C-PACE (Centre for Processing Accelerated Corporate Exit) in 2023, a clean application with no deficiencies and no creditor objections during the public notice period is often processed in well under two months by C-PACE itself, though total time from board resolution to final STK-7 publication — including the mandatory thirty-day objection window — typically lands around two to three months end to end. Cases with unfiled returns, disputed liabilities, or unresponsive directors can extend well beyond this, sometimes to six months or more, since each round of deficiency queries adds its own response and re-review cycle.
Can I close my OPC without a statutory audit?
Many small OPCs and dormant companies do not require a full statutory audit for closure, but this depends on turnover, paid-up capital, and whether the company falls under mandatory audit thresholds during the financial years it operated. Final accounts must still be prepared and certified by a practising Chartered Accountant as part of the Statement of Accounts (Form STK-8) regardless of audit status — confirm your specific exemption position with your CA before filing.
What happens to my GST registration during closure?
GST registration should be cancelled separately using Form GST REG-16 before or alongside the company strike-off application. Strike-off under the Companies Act does not automatically cancel GST, professional tax, or other departmental registrations — each must be closed through its own process, and unclosed registrations can trigger continuing return-filing obligations even after the company is dissolved.
Is there a penalty for delaying closure once a company is inactive?
Yes. A company that remains on the register without filing annual returns and financial statements continues to accrue late filing fees and can expose directors to disqualification under the Companies Act for non-filing across consecutive years. Directors of a defaulting company may also be restricted from being appointed to other companies until the default is cured, so delaying a genuine closure is rarely cost-free.
Can a company with outstanding loans or liabilities apply for strike-off?
No. Strike-off under Section 248 requires the company to have no outstanding liabilities to creditors, employees, or statutory authorities as of the application date. If liabilities exist, they must be settled, formally waived by the creditor, or the company should instead consider a formal winding-up process, since a false nil-liability declaration in the STK-2 affidavit exposes directors to legal consequences.
What is the difference between strike-off and formal winding up?
Strike-off (Section 248) is a simplified, faster route for companies that are inactive, asset-light, and debt-free, closed by application to the ROC. Formal winding up — voluntary or through the NCLT — is used where the company has significant assets to liquidate, creditors to settle in a structured order, or disputes to resolve, and follows a more elaborate court- or tribunal-supervised process. Most small and dormant companies use strike-off; companies with meaningful liabilities generally cannot.
Can strike-off be reversed once the company is dissolved?
Yes, in limited circumstances. Under Section 252 of the Companies Act, 2013, the company itself, or a member, creditor, or workman, can apply to the NCLT for restoration within twenty years of the strike-off notice if it can be shown the company was actually in operation at the time, or that the strike-off was otherwise improper; a separate three-year appeal window also exists for any person aggrieved by the Registrar's order. Restoration is a formal tribunal process and not something directors should treat as a routine fallback.
Do all directors need to sign the strike-off documents?
Yes. The affidavit (Form STK-4) and indemnity bond (Form STK-3) must generally be executed by every director of the company, not just the authorised signatory, since each director is individually indemnifying against future claims. If a director is untraceable or unwilling to sign, this becomes a significant obstacle and should be raised with your advisor early rather than at filing stage.
What happens to employees when a company closes?
All employment must be formally terminated in compliance with applicable labour law and the terms of employment contracts before the company applies for closure, with full and final settlements, gratuity, and PF dues cleared. Outstanding employee dues are treated as liabilities that block the nil-liability declaration required for strike-off, so this step cannot be deferred.
Can an LLP be closed the same way as a private company?
LLPs follow a broadly parallel but procedurally distinct route — striking off under the LLP Act using Form 24, rather than Form STK-2 under the Companies Act — with its own eligibility conditions around inactivity and nil liabilities. The underlying principles (settle dues, obtain partner consents, file a statement of accounts, wait through a notice period) are similar, but the specific forms, affidavits, and filing portal differ, so don't assume the company checklist applies directly to an LLP.
Will closing my company affect my credit history or future business plans?
A properly executed strike-off, with all statutory dues cleared and no default flags against the directors, generally does not carry negative consequences for future incorporations. However, if the company had unresolved loan defaults, unfiled returns before closure, or a director disqualification flag, that history can surface in due diligence for future ventures or directorships, which is why clearing dues correctly before filing matters more than closing quickly.
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