Strike Off & Company Closure

Introduction

Strike-off refers to the process of removing a company’s name from the register of companies maintained by the Registrar of Companies (RoC). Once a company is struck off, it ceases to exist as a legal entity and is considered dissolved.

The provisions relating to strike-off are governed by Section 248 to 252 of the Companies Act, 2013, read with the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.

1. Voluntary Strike-Off by the Company – Section 248(2)

A company may file for strike-off on a voluntary basis if:

  • It has not commenced business within one year of incorporation, or
  • It is not carrying on any business or operation for the last two financial years, and
  • It has no liabilities, and
  • It has obtained approval by passing a special resolution or consent of 75% of members in terms of paid-up share capital.
  • Form to be filed: Form STK-2 (along with required attachments and prescribed fees)

2. Strike-Off by Registrar – Section 248(1)

  • The Registrar of Companies may, on its own motion, remove the name of a company from the register if:
  • The company has failed to commence business within one year of incorporation
  • The company is not carrying on any business or operation for two immediately preceding financial years and has not applied for the status of a dormant company
  • The subscribers to the memorandum have not paid the subscription money and the company has not filed the declaration within 180 days (Section 10A non-compliance)
  • Form used by RoC: STK-1 (Notice for removal of name)

  • All pending statutory filings (e.g., financial statements and annual returns) must be completed
  • No ongoing litigation should be pending against the company
  • Clearance of all liabilities and closure of bank accounts
  • NOC from regulatory authorities (if applicable)
  • Documents Generally Required for STK-2 Filing
  • Indemnity bond (Form STK-3)
  • Affidavit by directors (Form STK-4)
  • Statement of accounts (certified by a Chartered Accountant)
  • Board resolution and special resolution
  • Consent of creditors (if applicable)
  • PAN card and identity proof of directors

  • Upon approval, the RoC issues a notice under STK-7, and the company is considered dissolved.
  • The certificate of incorporation stands cancelled.
  • The company cannot operate or enter into new business activities post strike-off.

A company or any aggrieved party may apply to the National Company Law Tribunal (NCLT) for restoration under Section 252 of the Act within the prescribed time limit (generally 3 years from strike-off).

Note:

Filing false information or suppressing facts in the strike-off application may lead to penal consequences under the Act.