Ready to Strike Off Your Company in India?

What Does Striking Off a Company Mean

Under Sections 248 to 251 of the Companies Act, 2013, the ROC has the authority to remove the name of a company from its register when the company is found to be defunct or non-compliant. Once struck off through a Gazette notification, the company ceases to be a legal entity.

Section 250 of the Companies Act, 2013 provides an important qualification. Even after strike off, a company may continue to be treated as existing for the purpose of realising assets, discharging liabilities, settling claims, or pursuing restoration before the NCLT. Pending obligations to creditors, tax authorities, and employees do not extinguish automatically on the date of removal.

When Is a Company Eligible for Strike Off

Under Section 248 of the Companies Act, 2013, a company may be eligible if it has not commenced business within one year of incorporation, has not carried on any business or operation for two immediately preceding financial years without applying for dormant status under Section 455, or has no assets or liabilities as of the application date.

ROC-initiated compulsory strike off may be triggered by continuous non-filing of financial statements under Section 137 or annual returns under Section 92, failure to maintain a valid registered office, or non-response to statutory notices.

Voluntary vs Compulsory Company Strike Off

Voluntary Strike Off Under Section 248(2)

A voluntary strike off is initiated by the company itself. The board of directors passes a resolution authorising the application, all outstanding liabilities are settled, bank accounts are closed, a CA-certified nil balance sheet is obtained, and Form STK-2 is filed with the ROC with the prescribed documents and a government fee of Rs. 10,000. This is the recommended path as it allows controlled closure, proper settlement of dues, and reduced future legal exposure for directors.

Compulsory Strike Off Under Section 248(1)

A compulsory strike off is initiated by the ROC when it has reasonable cause to believe a company is defunct, typically due to non-filing, an unverifiable registered office, or non-response to statutory notices. Directors of compulsorily struck-off companies face disqualification under Section 164(2) and DIN deactivation, preventing appointment as directors in any other company until the disqualification period expires.

Who Cannot Apply: Disqualifications Under Rule 3

Rule 3 of the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016 bars the following categories from filing Form STK-2:

• A company that has changed its name or shifted its registered office from one state to another within the three months immediately preceding the application date.
• A company that has disposed of property or rights for value within the preceding three months, other than for the purpose of concluding the strike-off application itself.
• A company that has made an application to the Tribunal under Section 230 for compromise or arrangement that has not been concluded.
• A company that is being wound up voluntarily or by the Tribunal.
• A company with outstanding charges registered under Section 77 and not yet satisfied.
• A listed company.
• A company with any pending prosecution under the Companies Act, 2013 or any other statute.

These disqualifications must be verified at the board meeting stage. An application filed in violation of Rule 3 will be rejected by the ROC.

Documents Required for Company Strike Off

• Board Resolution: Approving the strike-off proposal, authorising a director to sign and file Form STK-2, and confirming that all liabilities have been settled and bank accounts closed.
• Special Resolution or Consent of 75% Members: A special resolution passed in a general meeting, or written consent from members holding at least 75% of the paid-up share capital.
• Indemnity Bond in Form STK-3: Executed by all directors on stamp paper, indemnifying the government and third parties against any future claims arising from the company's pre-application activities.
• Affidavit in Form STK-4: Sworn by each director individually, confirming no pending liabilities, litigation, assets, or undisclosed statutory dues.
• CA-Certified Statement of Accounts: Certified by a practising Chartered Accountant, not older than 30 days from the date of filing, reflecting a nil or near-nil asset and liability position with the CA's UDIN on the certificate.
• PAN and Aadhaar of All Directors: For ROC identity verification.
• Registered Office Address Proof: A current lease agreement and utility bill, valid as of the filing date.
• Bank Account Closure Confirmation: Documentary evidence that all the company's bank accounts have been formally closed.

Company Strike Off Process: Step-by-Step

Step 1: Board Meeting and Eligibility Verification

The board must convene a meeting with proper notice under Sections 173 and 174 of the Companies Act, 2013. At this meeting, the board verifies eligibility under Section 248(2), confirms the company is not disqualified under Rule 3, passes the resolution approving the application, and authorises the signing director. All MCA annual returns and financial statements must be fully up to date before this step proceeds.

Step 2: Settle Liabilities and Close Bank Accounts

All outstanding liabilities including statutory dues, vendor payments, employee settlements, and regulatory fees must be fully discharged. All bank accounts in the company's name must be formally closed and documentary closure confirmations obtained. Bank accounts left open are among the most frequent causes of rejection at the ROC examination stage.

Step 3: Cancel GST Registration and Clear Tax Filings

If the company holds an active GST registration, cancellation must be applied for through Form GST REG-16 on the GST portal. All pending GSTR-1, GSTR-3B, and GSTR-9 returns must be filed, and the final return in Form GSTR-10 must be submitted within three months of cancellation. Simultaneously, all pending income tax returns must be filed and any outstanding tax demands resolved before the STK-2 is submitted.

Step 4: Obtain CA-Certified Statement of Accounts

A practising Chartered Accountant must certify a statement of accounts as of a date not earlier than 30 days before the STK-2 filing date. The statement must reflect that the company has no assets, liabilities, pending transactions, or undisclosed obligations. The CA's membership number and UDIN must appear on the certificate.

Step 5: File Form STK-2 on the MCA Portal

Form STK-2 is filed online through the MCA21 portal. The authorised director completes the form, uploads all prescribed attachments including Form STK-3, Form STK-4, the CA-certified statement, board resolution, and registered office proof, and pays the government fee of Rs. 10,000.

Step 6: ROC Examination and Cross-Departmental Verification

The ROC verifies the company's MCA filing history, cross-checks with the Income Tax Department for pending assessments, confirms that the GSTIN has been cancelled, and verifies the DIN status of all directors. Inconsistencies trigger a query through Form STK-7, which the company must respond to within the prescribed period.

Step 7: Public Notice in Form STK-6

Upon satisfactory review, the ROC publishes a public notice in Form STK-6 in the Official Gazette inviting objections from creditors, employees, or interested parties within 30 days. If no valid objections are received, the ROC proceeds to the final step.

Step 8: Gazette Notification and Removal from Register

After the objection period closes, the ROC publishes a final Gazette notification removing the company's name from the Register. From this date, the company ceases to exist as a legal entity for all operational purposes, subject to the limited survival provisions under Section 250.

Timelines and Government Fees

Government fee for Form STK-2: Rs. 10,000 (flat, regardless of authorised capital). Processing may extend beyond 180 days where income tax assessments are pending or GST registration has not been cancelled prior to ROC cross-verification.

Strike Off vs Winding Up vs Dissolution

Strike off is appropriate only for companies with no assets, no liabilities, and no ongoing disputes. Winding up is the correct mechanism where assets must be distributed, creditors are involved, or disputes require judicial resolution.

Strike Off vs Dormant Company Status Under Section 455

Section 455 of the Companies Act, 2013 allows a company that is temporarily inactive but intends to resume operations to apply for dormant status through Form MSC-1 with the ROC, avoiding permanent removal from the register.

Where any possibility of future use exists, dormant status is the legally safer option. Once the ROC acts on a strike-off application, full NCLT proceedings are required for reversal, making the decision irreversible for all practical purposes unless restoration is successfully obtained.

GST and Income Tax Closure Checklist

GST Closure: File all pending GSTR-1, GSTR-3B, and GSTR-9 returns. Apply for GSTIN cancellation through Form GST REG-16. File the final return in Form GSTR-10 within three months of cancellation. Reverse all remaining Input Tax Credit balances as required. Resolve or withdraw any pending refund claims before cancellation.

Income Tax Closure: File all income tax returns under Section 139 of the Income Tax Act, 1961 for every assessment year in which the company was registered. Pay any outstanding self-assessment tax. Respond to and resolve any pending income tax notices or demand orders. File all pending TDS returns under Form 24Q, 26Q, or 27Q and clear any outstanding TDS deposits. The company's PAN is not formally cancelled upon strike off; all future communications from tax authorities will be addressed to the registered office address on MCA records.

Restoration of a Struck-Off Company Under Section 252

Section 252 of the Companies Act, 2013 provides the mechanism for restoration before the NCLT. An aggrieved member, creditor, or workman may apply within three years from the date of the Gazette notification in cases of compulsory strike off. The company itself or any member may apply within 20 years where the strike off was procured by fraud or mistake, or where justice otherwise requires restoration.

Upon restoration, the company is deemed to have continued in existence as if its name had never been removed. All ROC filings due between the strike-off date and the restoration date must be completed within timelines specified by the NCLT. Restoration also revives retrospective tax and compliance obligations for the intervening period, including penalties and late fees on unfiled returns.

Impact on Directors Personally After Strike Off

Strike off does not discharge directors from personal liability. Key consequences include the following.

• Under Section 164(2), directors of a company that failed to file financial statements for three or more consecutive financial years are disqualified from serving as directors in any company for five years. This disqualification is recorded against the individual DIN on the MCA portal and is visible to all ROC searches.
• Under Section 179 of the Income Tax Act, 1961, pending tax demands against the company can be pursued directly against directors who were in charge of and responsible for the conduct of the business at the relevant time.
• Under Section 250, where business was carried on with intent to defraud creditors or for fraudulent purposes before the strike off, every person knowingly party to such conduct remains personally liable without limitation of liability, even after the company's name has been removed from the register.

Common Reasons STK-2 Applications Are Rejected

• Unfiled annual returns or financial statements in the MCA system are the most consistent administrative trigger for rejection.
• An active GSTIN at the time of ROC cross-departmental verification is among the most frequent practical causes.
• Open income tax demands or assessments flagged during cross-verification with the Income Tax Department.
• Bank accounts of the company were not formally closed before filing.
• Registered office proof that is expired, older than two months, or inconsistent with the address on MCA records.
• Mismatches between director declarations in Form STK-4 and company information in the MCA system.
• Rule 3 disqualifications not identified and remedied before filing, including name changes, registered office state changes, or property disposals within three months of the application date.

How Virtual Office Supports the Strike Off Process

Maintaining a verifiable and MCA-compliant registered office address is a regulatory requirement throughout the company strike off process. Form STK-2 mandates current registered office proof as a mandatory attachment, and the ROC cross-checks address validity during the examination phase. Expired or inconsistent address documentation is a direct cause of rejection.

myHQ Virtual Offices provide companies with a legally compliant registered office address backed by a valid lease agreement, NOC, and utility bill documentation structured to meet MCA requirements. Whether the company is in the process of voluntary strike off or managing address compliance during a restoration proceeding before the NCLT, myHQ ensures all documentation remains current and regulatory-grade throughout.

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