A company you have stopped using does not stop costing you
Plenty of Private Limited companies end up dormant — a venture that did not take off, a vehicle set up for a deal that never happened, a business the founders have moved on from. The instinct is simply to walk away: stop trading, stop filing, forget about it. That is the most expensive thing you can do. A company that exists on the register keeps owing its annual AOC-4 and MGT-7 filings every year whether or not it does any business, the ₹100-a-day-per-form late fee runs without a ceiling, and after enough defaults the Registrar strikes the company off its way — with penalties and disqualification of the directors for five years. Closing a company cleanly, through Form STK-2, is how you stop the meter and walk away without a tail of liability. Here is how it works.
Two ways a company comes off the register — only one is yours to choose
Striking a company's name off the Register of Companies happens under Section 248 of the Companies Act, 2013, and it runs on two tracks:
- The Registrar strikes it off (Section 248(1)): the ROC can remove a company on its own initiative — typically where the company has not commenced business within a year of incorporation, or has not carried on business for two financial years and has not sought dormant status. It sends a notice (STK-1), publishes a public notice (STK-5), and eventually dissolves the company (STK-7). This is the route that carries the penalties and the director disqualification, because it means you let it lapse.
- You apply to strike it off (Section 248(2)): the company applies voluntarily in Form STK-2 to have its own name removed. This is the clean, controlled exit — you decide the timing, you close the affairs in order, and you come out without the black mark.
The whole point of doing an STK-2 is to reach the same end — the company gone from the register — but on your terms rather than the Registrar's.
When a company qualifies to file STK-2
Voluntary strike-off is available where the company fits one of the grounds in Section 248(1):
- It has failed to commence business within one year of incorporation — the classic case of a company that was formed but never got going. (This is the same one-year commencement point tied to the INC-20A declaration.)
- It has not been carrying on any business or operation for the two immediately preceding financial years and has not applied for dormant company status.
What you must do before you can file
STK-2 is not a form you file to escape a mess — it is a form you file once the company is already tidy. Three things have to be true first:
- All liabilities extinguished. The company must have cleared everything it owes — creditors, statutory dues, loans. You cannot strike off a company to dodge its debts.
- Members' approval. The application must be backed by a special resolution, or the consent of 75% of the members in terms of paid-up share capital.
- Filings brought up to date. Overdue annual returns generally have to be filed up to the end of the financial year in which the company last carried on business before the application will go through — you clear the backlog, then close.
The documents that ride with STK-2
The application carries a specific set of attachments, and this is where a company most often gets it wrong:
- Indemnity bond (Form STK-3) from every director, indemnifying against any liability that surfaces after the company is struck off.
- Statement of accounts (Form STK-8), certified by a Chartered Accountant, made up to a date not more than thirty days before the date of the application — so the accounts have to be freshly drawn, not last year's. This thirty-day window is why the statement is the last thing prepared: you clear the backlog and pass the resolution first, then draw the accounts, so they are still current when the STK-2 actually goes in.
- Affidavit (Form STK-4) from every director.
- A certified copy of the special resolution or the members' consent, and a statement about any pending litigation.
The companies that cannot use this route
Not every company can be struck off, and not at every moment. Section 249 bars a company from applying under 248(2) if, at any time in the previous three months, it has changed its name or shifted its registered office from one State to another, disposed of property or rights it held for value (other than in the ordinary course of business), or engaged in any activity beyond what is needed to wind up its affairs and make the application. A company that has applied to the Tribunal for a compromise or arrangement that is not yet concluded, or that is already being wound up, is out too. Separately, the rules keep certain categories off this route altogether — among them companies with charges still pending satisfaction, companies with outstanding public deposits, companies under inspection or investigation, listed companies, and Section 8 (not-for-profit) companies. If a lender's charge is still open on the company's records, clearing it is the first job before strike-off is even possible.
What happens after you file
Once the Registrar is satisfied with the application, it publishes a public notice in Form STK-6 inviting objections, giving anyone with a claim a window to raise it. If nothing stands in the way, the Registrar strikes the name off and issues the notice of dissolution in Form STK-7, and the company ceases to exist from the date named in it. One thing does not vanish with the company: the liability of every director, officer and member continues as if the company had not been dissolved, and can be enforced — which is exactly why the clean route, with liabilities genuinely extinguished and the indemnity bond given, protects you and the lapse route does not.
Strike-off, dormant status, or winding up — which one
Strike-off is the right tool for a company that is simply finished and has no assets or liabilities left to deal with. It is not the only option. A company that expects to be revived later — held for a future project — can instead apply for dormant company status and stay on the register with a lighter obligation rather than being removed. A company with real assets and liabilities to distribute and settle goes through winding up / liquidation, a fuller process, instead. Matching the exit to the company's actual state is the judgement call worth getting right before you file anything.
Where this sits in the company's life
Strike-off is the last entry in a Private Limited company's lifecycle — the bookend to the SPICe+ incorporation that began it. Everything in between — the first-year INC-20A, the annual AOC-4 and MGT-7, the director KYC and board changes — is the compliance that a live company carries, set out in full in our Private Limited compliance calendar. Knowing how to close a company cleanly is part of knowing what you take on when you open one, which our comparison of the five business structures weighs up front.
How we handle it at RDA, Baner
At RDA Advisory, Baner, we close dormant companies cleanly through STK-2. We check the company actually qualifies and is not barred under Section 249, clear any charge still open on its records, bring the overdue annual filings current, draw the fresh CA-certified statement of accounts, prepare the STK-3 indemnity bonds and STK-4 affidavits and the special resolution, and file the STK-2 — so the company comes off the register with the directors protected, rather than being struck off by the Registrar with penalties and a five-year disqualification. Where strike-off is the wrong fit, we tell you so and point you to dormant status or winding up instead. Office No. 102, Snehraj Apartment, Baner, Pune 411045 · call +91 77570 45059.
Sitting on a company you no longer use? Let us close it properly
A dormant Private Limited company in Pune quietly racking up filing defaults? RDA runs the full STK-2 strike-off — the qualification check, the charge and backlog clean-up, the CA-certified accounts, the indemnity bonds and the filing — so the meter stops and you walk away without a liability tail. Book a consult at rdatax.in or call +91 77570 45059, or see our ROC and secretarial service. RDA Advisory, Baner, Pune.
Verification note: The process described here is based on the Companies Act, 2013 and the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016, as administered by the Ministry of Corporate Affairs (mca.gov.in): the removal of a company's name from the Register of Companies under Section 248, both on the Registrar's own initiative under Section 248(1) and on a voluntary application by the company in Form STK-2 under Section 248(2), after extinguishing all its liabilities, supported by a special resolution or the consent of 75% of members in terms of paid-up share capital; the grounds of failure to commence business within one year of incorporation or non-carrying on of business for two immediately preceding financial years without seeking dormant status; the attachments to the application, namely the indemnity bond in Form STK-3, the statement of accounts certified by a Chartered Accountant in Form STK-8 made up to a date not more than thirty days before the application, and the affidavit in Form STK-4; the restrictions in Section 249 on making an application within three months of specified acts, and the exclusion of certain companies (including those with charges pending satisfaction, outstanding public deposits, those under inspection or investigation, listed companies and Section 8 companies) from this route; the public notice in Form STK-6, the dissolution notice in Form STK-7, and the continuing liability of directors, officers and members under Section 250. Forms, fees and time limits are periodically revised by the MCA; confirm the current requirements for your company with your CA or company secretary. This is general information, not legal or professional advice.
