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What is Company Strike Off?
Understanding the legal process of removing a company's name from the Registrar of Companies under Section 248.
Eligibility Criteria
Check if your company qualifies for voluntary strike off and conditions that must be met.
Documents Required
Complete checklist of documents needed for successful company strike off application.
Step-by-Step Process
Detailed walkthrough of the entire strike off process from application to final approval.
Complete Timeline
Understand the expected timeline from application submission to company dissolution.
Cost Involved
Breakdown of government fees, professional charges and other costs for company strike off.
Important Points
Critical compliance requirements and legal obligations during the strike off process.
Common Mistakes
Avoid these frequent errors that lead to application rejection or legal complications.
Striking off a company refers to the process of removing a company's name from the Register of Companies maintained by the Registrar of Companies (ROC). This effectively dissolves the company and brings its legal existence to an end. The process is governed by Section 248 of the Companies Act, 2013 and the Companies (Removal of Names of Companies from the Register of Companies) Rules, 2016.
There are two ways a company can be struck off:
• Voluntary Strike Off: Initiated by the company itself when it's no longer carrying on business
• Suo Motu Strike Off: Initiated by the ROC when the company has failed to commence business within one year of incorporation or isn't carrying on business for two consecutive financial years
Eligibility Criteria for Voluntary Strike Off
Not all companies can apply for strike off. The company must meet specific conditions to be eligible:
Companies That CAN Apply:
• Companies that haven't commenced business within one year of incorporation
• Companies that aren't carrying on any business for the last two financial years
• Companies with no assets and no liabilities (or minimal assets/liabilities that can be settled)
• Companies that have not filed any application for compounding
• Companies not involved in any pending litigation
Companies That CANNOT Apply:
• Listed companies
• Companies that have defaulted in repayment of deposits
• Companies that have charges registered with ROC
• Companies against which any prosecution is pending
• Companies where arbitration or conciliation proceedings are pending
• Companies that have been ordered by Tribunal for winding up
Essential Documents for Company Strike Off
Proper documentation is crucial for a successful strike off application. Here's the complete checklist:
Mandatory Documents:
• Indemnity Bond: In prescribed format duly notarized
• Statement of Accounts: Audited or unaudited as applicable
• Affidavit: From all directors in prescribed format
• Special Resolution: Or consent of 75% members in terms of paid-up share capital
• No Objection Certificates: From secured creditors, if any
• Latest Financial Statements: Including balance sheet and profit & loss account
Additional Documents (If Applicable):
• Copy of published newspaper advertisement
• Copy of Board Resolution authorizing the application
• Copy of utility bills showing no operations
• Bank account closure proof
• PAN surrender application
Step-by-Step Process for Company Strike Off
Follow this detailed process to ensure smooth and compliant company closure:
• Board Meeting: Convene a board meeting to approve the strike off proposal and authorize a director to make the application
• Special Resolution: Pass special resolution or obtain consent of 75% members in terms of paid-up share capital
• Settle Liabilities: Clear all outstanding liabilities and close bank accounts
• Newspaper Advertisement: Publish notice in Form STK-6 in one English and one vernacular newspaper
• Application Filing: File Form STK-2 with ROC along with required documents and fees
• ROC Verification: ROC verifies the application and may seek additional information
• Public Notice: ROC publishes notice on MCA website for 30 days for objections
• Final Order: ROC issues strike off order and publishes in official gazette
Complete Timeline for Company Strike Off
Understanding the timeline helps in proper planning and compliance. Here's the typical timeline:
Preparation Phase
Conduct board meeting, prepare documents, obtain necessary approvals and clear liabilities
Application Filing
File Form STK-2 with ROC along with all required documents and government fees
Newspaper Publication
Publish notice in newspapers within 30 days of filing Form STK-2
ROC Verification
ROC reviews application and may raise queries or seek additional documents
Public Notice Period
ROC publishes notice on MCA website for 30 days for public objections
Final Approval
ROC issues strike off order and publishes in official gazette
Cost Involved in Company Strike Off
The total cost for striking off a company includes government fees, professional charges, and incidental expenses:
Government Fees:
• Form STK-2 Filing Fee: ₹1,000 to ₹5,000 based on authorized capital
• Form STK-6 Publication Fee: Included in newspaper advertising costs
Professional Fees:
• Chartered Accountant/Company Secretary: ₹5,000 - ₹15,000 for documentation and certification
• Legal Consultant: ₹3,000 - ₹10,000 for affidavit and indemnity bond
Other Expenses:
• Newspaper Advertisement: ₹2,000 - ₹5,000 per newspaper
• Notarization Charges: ₹500 - ₹1,000 per document
• Incidental Expenses: ₹1,000 - ₹2,000 for miscellaneous costs
Important Points to Remember
Keep these critical points in mind throughout the strike off process:
• Director Liability: Directors remain liable for company actions prior to strike off for up to 3 years
• Asset Distribution: Any assets remaining after strike off become property of the government
• Tax Clearances: Obtain income tax clearance and close PAN with IT department
• GST Cancellation: Cancel GST registration before applying for strike off
• Employee Settlements: Clear all employee dues including provident fund and gratuity
• Record Keeping: Maintain company records for at least 8 years after strike off
• Bank Account Closure: Close all company bank accounts before filing application
Common Mistakes to Avoid
• Incomplete Documentation: Submitting forms without required attachments or with incorrect information
• Pending Compliances: Applying while annual returns or financial statements are pending
• Outstanding Liabilities: Not clearing all dues including taxes, loans, and vendor payments
• Incorrect Newspaper Publication: Not following format requirements or publishing in wrong newspapers
• Missing Director Consent: Not obtaining consent from all directors for the application
• Bank Account Active: Filing application while company bank accounts are still operational
• Ignoring ROC Queries: Not responding to ROC queries within stipulated time
Case Study: Smooth Strike Off for Tech Startup
Company: InnovateTech Solutions Pvt. Ltd. (Name changed for confidentiality) Situation: A technology startup that ceased operations after 2 years due to market conditions. The company had minimal transactions but pending statutory compliances.
The Challenge:
• Pending annual filings for the last financial year
• Active GST registration with nil returns
• Operational bank account with minimal balance
• Unclear about strike off eligibility and process
The Liquetax Solution:
• Conducted compliance audit to identify pending filings
• Filed all pending annual returns and financial statements
• Assisted in GST cancellation and bank account closure
• Prepared and filed Form STK-2 with all required documents
• Managed newspaper publication and ROC communication
The Outcome:
• Successfully obtained strike off approval in 95 days
• Zero queries or objections from ROC
• Complete compliance with all legal requirements
• Directors relieved from ongoing compliance burden
Frequently Asked Questions (FAQ)
No. A company must clear all its liabilities, including loans, before applying for strike off. You need to obtain No Objection Certificates (NOCs) from all secured creditors and settle all outstanding dues.
After strike off, any remaining assets of the company become property of the government. It's advisable to distribute or settle all assets before applying for strike off to avoid this situation.
Yes. A struck off company can be restored within 20 years by filing an application with NCLT. However, this is a complex legal process that requires valid grounds and proper documentation.
No. The Director Identification Number (DIN) remains active and can be used for other company directorships. Only the company's existence is terminated, not the directors' identities.
Strike off is a simpler process for defunct companies with no assets/liabilities, while winding up is a formal liquidation process for operational companies with assets and liabilities that need to be settled through a liquidator.
About Liquetax: Your Corporate Compliance Partner
At Liquetax, we specialize in corporate compliance and business closure services. With extensive experience in MCA regulations and company law, we ensure your strike off process is seamless, compliant, and stress-free.
Our team of qualified professionals including Company Secretaries, Chartered Accountants, and legal experts provides end-to-end assistance from eligibility assessment to final strike off approval.
Why Choose Us: 500+ successful company closures, 100% compliance rate, transparent pricing, and dedicated relationship managers for personalized service.
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