Company Strike Off in India 2025 – Process, Documents & Charges

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Striking off a company involves the act of removing the name of a company in the Register of Companies (ROC) which forms part of the Ministry of Corporate Affairs (MCA) in India. This is a cheap and time saving procedure of winding up a company that is not undertaking any business operation. The compulsory or voluntary action of the company may cause the process to begin. Either they may ask the Registrar of Companies (ROC) to do it by giving a notice or themselves can request that this be done to them. This procedure was outlined in section 248 to 252 in the Companies Act of 2013.

Strike off requirements

A company qualifies to be struck off as long as the company meets the following criteria:

No Business Operations: The company must have been having no business operations during the past two financial years.

No Liabilities: The company must not be undergoing any defaulted payments or outstanding liability.

No Current Legal Actions: The company must not have any current legal action.

No Assets & Liabilities: The company is not supposed to have any assets and liabilities to be outstanding at the time of applying to be struck off.

No Pendency Filings: There is no need of filing of any financial statements or annual returns up to the application date.

Deactivation of Bank Accounts: Closure certificate of bank: The company ought to have closed all its bank accounts and been given a closure certificate by the bank.

Striking Off a Company Process

A strike off may happen on voluntary basis by the company as per Section 248(2) of the Companies Act, 2013 or involuntary by the ROC as per Section 248(1).

Voluntarily Application to Strike off a Company

Any company can voluntarily submit an application to have its name removed off the register of companies by passing a special resolution or alternatively by having at least 75 percent of its members (based on paid-up capital) agree to have its name removed off the register of companies. Once the company has paid all its liabilities it can apply to have a strike-off in the following circumstances:

The company does not start engaging in business within 1 year of making such incorporation.

The company is dormant, and they have not been trading during the last two financial years; nor have they submitted an application to the Companies Act to be treated as being dormant under Section 455.

After company is submitted with its request, the ROC needs to publish the notice publicly as stated by the Act in order to proceed with the strike-off.

Company Strike Off Procedure in India: A Comprehensive Guide

Voluntary Strike off Guidelines to a Company

Voluntary strike off of a company follows the following steps:

Board Resolution: The company should make a board resolution to give the strike-off process.

Special Resolution: Shareholders should pass a special resolution of at least 75 per cent to countenance the company to be struck off after a strike off.

Within a period of 30 days after passing of resolution in the general meeting, file MGT-14.

Creditor approval: In case of the company having creditors, the consent is required.

Form STK-2: The company is required to file form STK-2 and attach the following:

Directors signed indemnity bond (STK -3)

Accounts statement (not be more than 30 days before the filing date) signed by Charted Accountant (STK -8)

Directors affidavit (STK-4)

Memorandum of special resolution copy

ROC scrutiny: ROC scrutinizes the application and on being satisfied a notice of striking off is issued.

Giving of Notice: The notice is widely announced in the Official Gazette where objection is also welcomed.

Final Strike Off Order: In the case where no objection is registered, ROC strikes off the company and revise the MCA books.

ROC Compulsory Strike-Off

The ROC is able to strike-off a company incase it:

Does not start business within one year of being incorporated

Fails to lodge annual returns and financial statements in two straight years

It is found to have contravened the Companies Act, 2013

The ROC in such instances sends a notice to the company and the directors with a chance to reply. In the event of no response to be received, the company is struck off.

Striking off a Company Draft Documents

The documents that have to be used in the strike-off are the following:

1. Board and shareholders resolutions

2. Financial statements

3. Tax-clearance certificate

4. The statement of asset and liability

5. Dissolution- or winding-up evidence

6. Creditor approval Concurrence of creditors

7. Approval of government regulators

8. Other as may be needed based on jurisdiction

9. One is recommended to approach legal professionals or government sources to seek proper and specific requirements.

Strike-off company status

The status of strike-off company The status of a company that has been through the strike-off or dissolution procedure is called the strike-off company status. The striking off puts an end to the legal existence of a company since the name is likewise removed off the register of companies. The concrete mechanisms and terms might be subject to the jurisdiction differences but the basic idea is uniform.

The striking-off of a company renders the company inactive and it is not legally operation. This means that the business process has ended and that its financial activities including assets, liabilities, and legal issues are under the management of the legal acts and the rules being applied.

Strike Off Consequences

The company is stripped of the status of a legal entity.

The directors can be barred in directorship of other firms.

This enables other businesses to use the name of the company.

Any un-distributed assets vest to government.

Conclusion

When all legal requirements have been satisfied, striking a company is easy. To prevent the costs of non-compliance and fines imposed by the government, the companies that are dormant and not intending to continue operations should use an appropriate legal process. One is recommended to seek the advice of a legal expert/company secretary during closure process to ease the process.

Company Strike-Off-Overview

1. What is strike-off?

Strike-off of the company is a process in which the name of a company is struck off the official register and a company is dissolved.

2. What is the rationale of striking off a company?

There are several reasons as to why a company may opt to strike its name; this may be due to long periods of non-trading of the company, due to economic reasons, voluntary closure or failure to comply with regulatory filing.

3. How does strike off differ with that of winding up?

Although both of them involve the closing of a company, strike-off is simpler in companies without or with few liabilities and winding up is a more complex procedure in companies which have assets and liabilities.

4. What is the criteria of a company becoming strike-off?

A company may be struck off when it still fails to start business one year after its incorporation, has failed to proceed with business within last two financial years or it has not submitted required documents.

5. Grounds of strike off?

Other reasons that could cause companies to be struck off include failure to start business, inactive in two years, not filing statutory documents, or engaging in fraud or regulatory offenses.

6. Selling of Private Limited Company

Sale of company means transfer of the majority shares to the individual who can best fit the company. The process leads to the ultimate liquidity of the firm.

but not all the stocks are transferred but only majority of the shares are transferred with responsibility of stocks. Making the company Defunct: If a company wishes to strike off its name from the register of the company it can declare itself defunct by filling in a form called Form FTE, after this the registrar of the company is the one to shut it down.

7. Winding Up of Private Limited Company:

Winding up of the private limited company is required in case of either the company wants to terminate its business or when the company becomes bankrupt. Winding up option can also be triggered by the willful act of the shareholders or the creditors, or, in fact, it may simply happen on the request of the tribunal (Compulsory Winding up ). Provided there are no dissolution of the company and no recovery of assets in accordance with the termination, the company is still in operation and therefore the directors will be expected to fulfill all the requirements of the compliances of the private limited company.

8. How can one close a Pvt.Ltd.Co.?

Ans. To have a strike off, companies will move according to the following outlined steps before taking the final approval of a strike off: Holding of Board Meeting: Major enactments in the business environment have required the Board to pass the Board Resolutions. Liquidation of debts: A firm that wishes to be struck off should be able to liquidate its debts. General Meeting: The company should hold general meeting of shareholders by passing a resolution to strike off the name of the Company.

Q9. What is the time frame for the strike off of a company?
Ans. The process of striking off a company in India usually takes a minimum of 3 months. However, the duration can extend depending on the complexity of the case, pending compliances, or objections raised. Generally, once the notice of strike off is published in the Gazette and 3 months have passed, the company ceases to exist as a legal entity.

Q10. What happens after the company is struck off by the Registrar?
Ans. Once a company is struck off:

The company loses its legal existence and cannot continue operations.
Any remaining assets automatically vest with the Government.
Directors may face disqualification and restrictions from holding directorship in other companies.
Banks will refuse financing and all contracts with suppliers or customers stand terminated.
If directors/shareholders continue business after strike off, they lose the protection of limited liability and may be held personally responsible for company debts