How to Close a Private Limited Company Through Strike Off (Form STK-2)

Who can apply for strike off?

A company can apply under section 248(2) if it has not commenced business within a year of incorporation, or has not carried on business or operation for the two immediately preceding financial years. Before applying it must extinguish all liabilities. Since May 2023, voluntary strike-off applications are processed centrally by MCA's Centre for Processing Accelerated Corporate Exit (C-PACE), which has made timelines more predictable.

When is strike off not allowed?

Section 249 bars an application if, in the previous three months, the company changed its name or shifted its registered office between states, disposed of property or rights held for business, or carried on any activity other than what was needed to close. It is also barred while a scheme of compromise, winding-up or insolvency process is pending. Listed companies and those under investigation or prosecution cannot use this route.

• Name change or inter-state office shift in the last 3 months
• Disposal of business property in the last 3 months
• Pending winding-up, insolvency or compromise
• Pending inspection, inquiry, investigation or prosecution
• Outstanding liabilities, including tax and statutory dues

Documents for STK-2

Every director signs an indemnity bond in STK-3 and an affidavit in STK-4, both notarised. The statement of accounts showing nil assets and liabilities must be certified by a practising chartered accountant and made up to a date not more than 30 days before filing. Where a sectoral regulator governs the company, its no-objection is also needed.

Overdue filings and prerequisites

MCA requires the company to file all pending financial statements (AOC-4) and annual returns (MGT-7 or MGT-7A) up to the end of the financial year in which it ceased business before applying. Close the bank account and keep the closure letter, cancel GST registration through REG-16 and file the final return, and surrender other registrations such as professional tax and IEC. File the last income tax return and clear any demands.

Settle employee dues, TDS, PF and vendor balances before the statement of accounts is drawn up, because the CA certifies nil liabilities and the directors personally indemnify against anything that later surfaces.

What happens after filing?

If the application is complete, the ROC issues a public notice in STK-6 on the MCA website and in the Official Gazette, inviting objections within 30 days. If none are received, the ROC strikes off the name and publishes STK-7 in the Gazette, after which the company stands dissolved. Directors' liability for past acts continues, and any creditor can apply to restore the company within the limitation period under section 252.

Common mistakes

Applying with an open bank account or undeposited TDS, using a statement of accounts older than 30 days, or skipping overdue AOC-4 and MGT-7 filings are the most common reasons for rejection. A strike off is also unsuitable if the company holds assets or has creditors; winding up is the right route then.

Step by step

1. 1Stop business

   Pass a board resolution to cease operations.

2. 2Settle liabilities

   Pay creditors, employees, taxes and statutory dues.

3. 3Close registrations

   Cancel GST, PT and other registrations and close the bank account.

4. 4File overdue returns

   File pending AOC-4, MGT-7/7A and income tax returns.

5. 5Pass special resolution

   Shareholders approve strike off or give 75% consent.

6. 6Prepare documents

   Sign STK-3 and STK-4; get a CA statement within 30 days.

7. 7File STK-2

   Submit with the ₹10,000 fee.

8. 8Track notice

   ROC publishes STK-6 and, after 30 days, STK-7.