Strike Off Company in India: Process, Legal Implications and Compliance Checklist

Striking off a company refers to the removal of a company’s name from the official register maintained by the Registrar of Companies (ROC) under the Companies Act, 2013. It is a simplified exit route for companies that are no longer operational and do not wish to continue their legal existence.

Once struck off, the company ceases to exist legally and is considered dissolved.

When Should You Strike Off a Company?

Companies often opt for strike-off when they:

• Are not carrying out any business activity for two or more years
• Have no significant financial transactions
• Are dormant or inactive
• Want a cost-effective exit instead of going through the winding-up process

This method is particularly useful for startups, small businesses, or one-person companies (OPCs) that want to avoid ongoing compliance costs.

Legal Basis: Strike Off Under Section 248 of Companies Act, 2013

The strike-off provisions are governed under Section 248 to 252 of the Companies Act, 2013. There are two main routes:

1. Voluntary Strike Off by the Company (Section 248(2))

The company itself applies to ROC for removal from the register after fulfilling certain conditions.

2. Strike Off by ROC (Section 248(1))

The ROC initiates the process if the company is found inactive or non-compliant for an extended period.

Conditions to Apply for Voluntary Strike Off

A company can file for strike-off only if it meets all of the following conditions:

• Has not commenced business since incorporation or has been inactive for two or more years
• Has no liabilities or pending dues
• Has filed all pending financial statements and annual returns with ROC
• Has closed all bank accounts and settled statutory dues (GST, Income Tax, TDS, etc.)
• Obtains consent of shareholders through a special resolution

Important Note: Companies registered under Section 8 (non-profits), listed companies, and those with ongoing legal proceedings cannot apply for voluntary strike-off.

Step-by-Step Procedure for Strike Off Company

1. Hold a Board Meeting

The Board passes a resolution to apply for strike-off and authorizes a director to initiate the process.

2. Clear Liabilities

Ensure all outstanding dues, loans, and statutory obligations are fully cleared.

3. Close Bank Accounts

All company bank accounts must be officially closed with closure letters obtained from the bank.

4. File E-Form STK-2

Submit the strike-off application to the ROC using Form STK-2 along with the following documents:

• Copy of board and shareholder resolution
• Indemnity bond by directors (Form STK-3)
• Affidavit by directors (Form STK-4)
• Statement of accounts certified by a Chartered Accountant
• PAN, Aadhaar, and DSC of directors

5. Publication of Notice

ROC issues a public notice and allows for objections from stakeholders, if any, within 30 days.

6. Striking Off and Dissolution

If no objections are received, the ROC strikes off the company and publishes the notice in the Official Gazette.

Consequences After Strike Off

• The company ceases to exist legally and cannot carry out any business
• Directors are relieved from future compliance obligations
• Assets (if any) become government property unless distributed beforehand
• Any business carried out post strike-off is considered illegal and punishable

Difference Between Strike Off and Winding Up

Criteria	Strike Off	Winding Up
Cost	Low	High (includes court & professional fees)
Time Required	3–6 months	6–24 months
Who Initiates	Company/ROC	Tribunal or creditors
Legal Complexity	Simple process	Involves legal and tribunal process

Compliance Checklist Before Strike Off

• No business activity in the last 2 financial years
• No liabilities, debts, or pending dues
• All annual filings with MCA are up to date
• PAN, GST, TDS accounts are surrendered or inactive
• Directors’ affidavits and indemnity bonds are prepared
• Statement of Accounts is prepared and certified
• Board and shareholder resolutions are passed
• DSC (Digital Signature Certificate) is active for filings

FAQs on Strike Off Company

1. Can a company with pending tax dues apply for strike off?
   No. The company must clear all pending dues before applying for strike off.
2. How long does the strike-off process take?
   On average, it takes around 3 to 6 months from the date of application submission.
3. What happens if a struck-off company resumes business?
   It will be considered an illegal operation, and penalties or prosecution may follow.
4. Can the company be restored after strike off?
   Yes, by applying to the National Company Law Tribunal (NCLT) within 20 years from the date of strike-off.
5. Is the director personally liable after strike-off?
   No, unless fraud or misrepresentation was involved during the strike-off process.
6. Are LLPs eligible for strike-off?
   Yes, but they must file Form 24 under the LLP Act, not STK-2.
7. Is audit mandatory before applying for strike-off?
   Yes. A statement of accounts certified by a Chartered Accountant must be submitted.
8. What is Form STK-2?
   It is the official e-form filed with MCA to request the strike-off of a company.
9. Can ROC refuse the strike-off application?
   Yes, if conditions are not met or documents are incomplete.
10. What happens to trademarks or IP owned by the company?
    They must be transferred before dissolution or will lapse after strike-off.

Need Help to Strike Off Your Company?

Let Tradeviser’s Expert Consultancy Services handle it for you. From preparing accurate filings and resolutions to coordinating with ROC and ensuring legal compliance, we offer end-to-end support. Contact us today to close your company without complications or delays.