Company Strike Off (STK-2) vs Voluntary Liquidation: How to Close a Company in India
Strike off vs voluntary winding up: STK-2 (₹10,000 fee) for companies with no assets or liabilities vs IBC voluntary liquidation for solvent companies.
Short answer
Use strike off through Form STK-2 if the company has no business for two years or never started, and has no assets, liabilities or pending proceedings; it is cheaper and faster, with a ₹10,000 fee. Use voluntary liquidation under the Insolvency and Bankruptcy Code if the company has assets to distribute or liabilities to settle, since a liquidator must realise and pay them.
- Strike-off form
- STK-2, processed by C-PACE
- STK-2 fee
- ₹10,000
- Member consent for strike-off
- Special resolution or 75% of members by paid-up capital
- Voluntary liquidation law
- Section 59, Insolvency and Bankruptcy Code
- Liquidator
- Insolvency professional
- CCFS-2026 reduced fee
- Ended 31 August 2026
What is the difference?
Strike off under section 248 of the Companies Act is an administrative removal of the company's name from the register. It is meant for companies that are dormant in substance: no business for the two preceding financial years, or never commenced, with no assets and no liabilities. Applications in STK-2 are processed by the Centre for Processing Accelerated Corporate Exit (C-PACE).
Voluntary liquidation under section 59 of the Insolvency and Bankruptcy Code is a formal process for solvent companies that have assets, contracts or creditors. An insolvency professional acts as liquidator, collects claims, sells assets, pays creditors and distributes the surplus to shareholders, after which the NCLT orders dissolution.
Side-by-side comparison
The table compares the two exit routes for a private company. Timelines vary widely with the regulator's workload and the company's complexity, so treat them as indicative rather than guaranteed.
| Factor | Strike off (STK-2) | Voluntary liquidation (IBC) |
|---|---|---|
| Suitable for | Dormant companies with no assets or liabilities | Solvent companies with assets or liabilities |
| Authority | Registrar through C-PACE | Liquidator, IBBI regulations, NCLT order |
| Key approvals | Special resolution or 75% members' consent | Directors' declaration of solvency, special resolution, creditors' approval where debts exist |
| Prerequisites | Bank accounts closed, liabilities nil, pending filings done | Solvency declaration backed by audited accounts and valuation |
| Professional involved | CA or CS for documents | Insolvency professional as liquidator |
| Government fee | ₹10,000 for STK-2 | NCLT and other fees, plus liquidator's fee |
| Typical cost | Lower | Significantly higher |
| Typical duration | Several months | Often a year or more |
| Revival risk | Name can be restored by NCLT on application | Final once NCLT dissolves |
What does strike off require?
Before filing STK-2, the company must clear liabilities, close bank accounts, file overdue financial statements and annual returns, and obtain consent of members by special resolution or of 75% of members by paid-up capital. The application is supported by an indemnity bond in STK-3, affidavits in STK-4 and a recent statement of accounts certified by a chartered accountant.
The one-time Companies Compliance Facilitation Scheme 2026 allowed STK-2 at 25% of the normal fee until 31 August 2026. That relief has ended, so the full ₹10,000 fee applies again.
What does voluntary liquidation involve?
A majority of directors must make a declaration of solvency, supported by audited accounts and a valuation report, stating that the company can pay its debts in full. Members then pass a special resolution within four weeks to liquidate and appoint an insolvency professional as liquidator, and creditors holding two-thirds of debt in value must approve where the company has debts.
The liquidator makes a public announcement, collects and verifies claims, realises assets, pays creditors, distributes the surplus to shareholders and applies to the NCLT for a dissolution order. Tax clearances and closing returns add time, so a voluntary liquidation commonly runs for a year or longer.
Which should you choose?
The route is determined largely by the company's balance sheet. These rules help identify which applies, but a professional should review your accounts and pending filings before you file anything.
- Never started business, no assets or debts: strike off.
- Stopped trading, cleared all dues, cash distributed and accounts closed: strike off.
- Holds property, investments or significant cash to distribute: voluntary liquidation.
- Has creditors or contracts still running: settle them first, or use voluntary liquidation.
- Insolvent company: neither route; insolvency proceedings under the IBC apply instead.
Related services
Sources
- CCFS-2026 and STK-2 strike-off fees and conditions (IncorpX)
- How to close a private limited company via C-PACE (IncorpX)
Written by the Refogo Editorial Team from the official sources above and checked on 2026-10-31. Laws, rates and due dates change, and authorities often extend deadlines, so confirm your own case with a qualified professional. This is general information, not legal or tax advice. Read our editorial policy or report an error to support@refogo.com.
Common questions
How much does it cost to strike off a company in 2026?
The government fee for STK-2 is ₹10,000. The reduced 25% fee under CCFS-2026 was available only until 31 August 2026. Professional fees for documents and pending filings are extra.
Can a company with a bank balance apply for strike off?
No. All bank accounts must be closed and assets distributed or nil before applying. A company with assets to distribute should consider voluntary liquidation.
Can a struck-off company be revived?
Yes. A member, creditor or the company can apply to the NCLT for restoration within the time allowed by law if the strike-off was unjustified.
Who can be the liquidator in voluntary liquidation?
An insolvency professional registered with the Insolvency and Bankruptcy Board of India, appointed by the members' resolution.