Closing a company that is no longer active can help business owners avoid unnecessary compliance responsibilities and recurring costs. Under the Companies Act, 2013, an eligible company can apply to remove its name from the Register of Companies through the MCA process. This is commonly known as Strike off a company.

The voluntary removal process is governed primarily by Section 248 of the Companies Act, 2013 and the applicable rules. MCA has also centralized voluntary strike-off applications through the Centre for Processing Accelerated Corporate Exit (C-PACE), which has made the process more streamlined.

This guide explains the eligibility requirements, documents, MCA filing process, government fees, and expected timeline for closing an inactive company.

What Is Strike Off a Company?

Strike off a company means removing a company's name from the official Register of Companies maintained by the Registrar of Companies. Once the prescribed process is completed and the removal is published in the Official Gazette, the company is dissolved.

Section 248 allows a company to voluntarily apply for removal of its name after extinguishing its liabilities. The application requires the approval of shareholders through a special resolution or consent from members representing at least 75% of the paid-up share capital.

This route is generally useful for companies that have stopped operations and do not intend to restart their business.

Who Can Apply for Company Strike-Off?

A company may generally qualify for voluntary removal when it falls within the conditions specified under Section 248. For example, the company may have:

• Failed to commence business within one year of incorporation.
• Not carried on any business or operation for the immediately preceding two financial years and not obtained dormant company status.
• Settled its liabilities and obligations before making the application.

The law also specifies situations in which an application cannot be made, including certain recent changes in company name or registered office, disposal of property in specified circumstances, pending compromise or arrangement proceedings, or ongoing winding-up proceedings.

A company should therefore check its compliance and legal position before beginning the application.

Documents Required for Strike-Off

Preparing the documents correctly is one of the most important parts of the process. The principal documents required for Form STK-2 include:

1. Form STK-3 – Indemnity Bond

Each director generally needs to provide a duly notarised indemnity bond in Form STK-3. The bond provides an undertaking concerning liabilities that may arise after removal of the company's name.

2. Form STK-4 – Affidavit

An affidavit in Form STK-4 is required from every director. It confirms relevant facts concerning the company's affairs and the application for removal.

3. Statement of Accounts

The company must provide a statement of accounts in Form STK-8 showing its assets and liabilities. It should generally be prepared up to a date not more than 30 days before the application and certified by a practising Chartered Accountant.

4. Shareholder Approval

The application should be supported by the relevant special resolution or consent representing at least 75% of the members in terms of paid-up share capital.

5. Statement of Pending Litigation

Details regarding pending litigation involving the company must also be provided, where applicable.

6. Regulatory NOC

Companies operating in regulated sectors may need a No Objection Certificate from the relevant regulatory authority. The applicable rules specifically cover certain financial, insurance, capital-market and other regulated entities.

Before filing, the company should also ensure that its applicable statutory filings and financial statements are up to date. The rules require overdue financial statements and annual returns to be filed up to the financial year in which the company ceased business operations before filing STK-2.

MCA Process for Strike-Off

The MCA process involves several stages rather than simply submitting one online form.

Step 1: Check Eligibility

First, verify whether the company satisfies the conditions under Section 248 and is not affected by any restrictions.

Step 2: Settle Liabilities

All outstanding liabilities should be identified and settled. This can include loans, creditors, employee dues, taxes and other financial obligations.

The company should also address its bank accounts, assets and other financial matters before proceeding.

Step 3: Complete Pending Compliance

Any required overdue financial statements and annual returns should be filed before the STK-2 application, subject to the applicable rules and circumstances.

Step 4: Obtain Shareholder Approval

The company must obtain the required shareholder consent through a special resolution or the prescribed 75% member consent route.

Step 5: Prepare Required Documents

The directors should prepare the indemnity bonds, affidavits, statement of accounts and other supporting documents required for the application.

Step 6: File Form STK-2

The company files Form STK-2 electronically with the MCA along with the prescribed documents and government fee. The MCA's official instruction kit currently specifies a normal government filing fee of ₹10,000 for STK-2.

Step 7: C-PACE Processing

Voluntary strike-off applications are processed through C-PACE, which was established to centralize and accelerate the exit process. MCA reported that the average processing time had reduced to approximately 70–90 days in 2024.

Step 8: Public Notice and Final Dissolution

After processing, the prescribed public notice procedure is followed. If there is no valid objection and the Registrar is satisfied with the application, the company's name can be removed from the Register. Publication of the final notice in the Official Gazette results in dissolution of the company.

Strike-Off Fees

The standard MCA government fee for Form STK-2 is ₹10,000, according to the current MCA instruction kit.

However, the total cost of closing a company can be higher because professional charges may apply for services such as:

• Preparing and filing statutory forms
• Accounting and financial statement preparation
• Chartered Accountant certification
• Notarisation and documentation
• Clearing overdue compliance
• Professional advisory services

Therefore, business owners should distinguish between the statutory MCA filing fee and the overall professional cost of completing the closure.

How Long Does Company Strike-Off Take?

The exact timeline depends on the company's compliance status, document accuracy, objections and processing requirements.

Since the introduction of C-PACE, MCA has significantly reduced processing time for voluntary strike-off applications. MCA reported an average processing period of 70–90 days in 2024, while later government reporting stated that voluntary closure applications were being processed in an average of less than two months as of July 2025.

In practice, the complete process can take longer when the company has pending filings, defective documents, unresolved liabilities or other complications.

Common Mistakes to Avoid

Several issues can delay or complicate the application:

Ignoring Pending Compliance

A company should not assume that inactivity automatically eliminates annual filing requirements. Pending filings may need to be completed before STK-2 can be submitted.

Leaving Liabilities Unresolved

Loans, taxes, creditors and other obligations should be addressed before applying.

Incorrect Financial Statements

The statement of accounts must meet the applicable requirements, including the prescribed period and professional certification.

Missing Director Documents

Errors or omissions in STK-3, STK-4 or other attachments can result in queries or resubmission requirements.

Assuming Dissolution Removes All Liability

Dissolution does not necessarily eliminate liabilities or responsibilities of directors and other persons. Section 248 specifically preserves certain liabilities even after dissolution.

Conclusion

Strike off a company is a practical legal route for eligible businesses that have stopped operating and no longer wish to maintain their corporate structure. The process involves checking eligibility, clearing liabilities, completing applicable pending filings, obtaining shareholder approval, preparing the required documents and filing Form STK-2 with the MCA.

The normal STK-2 government fee is currently ₹10,000, while processing is handled through C-PACE. Although the process has become considerably faster, the actual timeline depends on the company's compliance position and whether MCA raises any queries.

Before applying, companies should carefully review their statutory records, financial obligations and documentation to reduce the risk of rejection or delay.