MCA Services

Closure of a Company

Closing a company properly is as important as starting it. The most common way to close an inactive company is voluntary strike-off under Section 248(2) of the Companies Act, 2013, by filing Form STK-2, which is processed centrally by C-PACE since April 2023. It needs a special resolution or the consent of 75% of members, a position of nil assets and liabilities, and an indemnity bond and affidavit from each director. The government fee quoted is Rs 10,000, and sources estimate about 60 to 110 days to three to six months to dissolution.

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Service Overview

What is Closure of a Company?

Closure, or strike-off, of a company means removing the company’s name from the Register of Companies so that it ceases to exist legally. Under Section 248, the Registrar can strike off a defunct company on its own initiative (Form STK-1) or on the company’s application (Form STK-2). Once the Registrar publishes the notice of dissolution in the Official Gazette (STK-7), the company stands dissolved.

It is different from simply stopping operations or becoming dormant. A company that is merely inactive still has to file annual returns and pay compliance costs, and its directors remain responsible. A formally struck-off company no longer has those obligations, but directors’ liability for undisclosed liabilities continues after dissolution under Section 248(7), so the closure must be done honestly and completely.

Closure of a Company

Who Needs This Service

This service is for promoters of inactive or failed businesses, startups that never began operations, companies whose projects have ended, subsidiaries of foreign groups that have exited India, and companies that merged their business elsewhere and no longer need the entity.

Keeping a dormant company alive has a cost. Annual ROC filings, audit, tax returns and fees continue even without business, and defaults lead to penalties and director disqualification. Closing a company stops these obligations and removes the risk of accumulating defaults.

Directors should be aware that they give a personal indemnity bond and affidavit, so they must be sure that all liabilities are cleared. Companies with outstanding loans, tax disputes or litigation are not suitable for strike-off and should consider other routes.

If you are unsure whether your company qualifies, we review the facts and advise before any filing is made.

Key Benefits

Ends annual compliance costs and risk of penalties for an inactive company
Complete document set: resolution, STK-3, STK-4 and CA-certified accounts
Eligibility check to avoid rejected applications
Guidance on closing GST, tax and bank registrations
Clear advice on alternatives such as liquidation

Next Steps & Related Services

After strike-off, keep records as required and ensure all registrations are closed.

Related services: Annual Compliance, ROC Compliance, GST Registration cancellation guidance and Statutory Compliance.

Common Mistakes

Applying while liabilities, loans or litigation remain.
Not filing pending annual returns before applying.
Forgetting to close GST, tax and bank accounts.
Giving incorrect affidavits, which can lead to later liability.
Assuming strike-off can easily be reversed.

Timeline, Costs & Practical Tips

Sources estimate about 60 to 110 days to three to six months. The government fee is Rs 10,000, with professional and certification costs extra.

Practical tip: clear pending ROC and tax filings first; most delays come from outstanding returns, mismatched accounts or missing certifications.

Written By

Raghav Sharma

Operations Executive

10+ Years Experience

As seen on

Raghav Sharma has 10+ years of experience covering Company Registration - Operation, MCA Services - Operation, Corporate Operation, Import Export Services - Operation, Goverment Licence Services - Operation, FSSAI - Operation, SEBI - Operation, Labour Compliance - Operation, Fund Raising - Operation, Licence & Certificate - Operations.

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Frequently asked questions

Need clarity?

Which form is used for voluntary strike-off?

Form STK-2 under Section 248(2).

What is the government fee?

Sources quote Rs 10,000.

How long does it take?

Sources say roughly 60 to 110 days to three to six months.

Does closure end directors' liability?

Not for undisclosed liabilities; directors remain liable under Section 248(7).

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