Closing a Private Limited Company in India can be done voluntarily through the Strike Off process (for inactive companies) or through formal winding up under the NCLT. Understanding which route applies to your situation is critical — the wrong process leads to rejection and wasted time.
Methods to Close a Company in India
1. Voluntary Strike Off — STK-2 (Fast Track Exit)
Best for: Companies that have never commenced business OR have been inactive for 2+ years
2. Compulsory Strike Off by Registrar
ROC can strike off companies that fail to file returns for 2 consecutive years
3. Voluntary Winding Up under Companies Act
Best for: Companies with assets, operations, and creditors — requires resolution + liquidator appointment
4. NCLT Winding Up
For insolvency, inability to pay debts — requires NCLT petition
Strike Off (STK-2) — Fastest Route
Eligibility criteria:
Prohibited: Companies cannot use STK-2 if they have:
- ▸Company has not carried on any business or operation since incorporation OR
- ▸Company has not carried on business for 2 consecutive financial years AND has not applied for dormant company status
- ▸No outstanding liabilities
- ▸No pending legal proceedings
- ▸Taxes (income tax, GST) all filed and cleared
- ▸Bank accounts closed
- ▸Listed on stock exchange
- ▸Pending regulatory proceedings
- ▸Outstanding deposits from public
- ▸Section 8 companies
- ▸Companies under investigation
Strike Off Process (STK-2)
Step 1: Board resolution to close company
Step 2: Clear all liabilities:
Step 3: Prepare final statement of accounts (audited)
Step 4: File all pending MCA annual returns and ITRs
Step 5: File Form STK-2 on MCA portal:
Step 6: MCA publishes notice in Official Gazette → 30 days for objections
Step 7: If no objections → Company struck off → Name removed from RoC register
- ▸Pay all outstanding vendors, loans
- ▸Close all bank accounts
- ▸Cancel all GST registrations, trademark licenses
- ▸Signed by 2 directors
- ▸Attach: Board resolution, affidavit (STK-3), indemnity bond (STK-4), bank account closure letter, audited accounts, statement of pending liabilities (nil)
Timeline and Costs
- ▸STK-2 process: 3–6 months from filing
- ▸MCA fee: ₹10,000 (for STK-2 form)
- ▸Professional fees: ₹15,000–₹40,000 (depending on pending compliance)
- ▸Prior compliance: All pending MCA filings, ITRs, and GST returns must be filed first (this can add ₹50K–₹2L if there are several years of arrears)
What Happens to Directors After Strike Off?
- ▸Directors can serve on other companies after closure
- ▸DIN remains valid but is "deactivated" until reactivated on next company appointment
- ▸If company is struck off for non-compliance (compulsory) → Directors may be disqualified under Section 164(2) from serving as director for 5 years
Conclusion
Closing a company correctly requires clearing all past compliance and filing STK-2 with proper documentation. Biswa Corporate Solutions handles the complete company closure process — pending MCA filings, ITR filing, GST cancellation, and STK-2 submission — minimizing cost and ensuring no future liability to directors.
